YieldBoost Mativ To 34.7% Using Options

Shareholders of Mativ Inc (MATV) looking to boost their income beyond the stock's 2.1% annualized dividend yield can sell the December covered call at the $20 strike and collect the premium based on the $1.55 bid, which annualizes to an additional 32.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 34.7% annualized rate in the scenario where the stock is not called away. Any upside above $20 would be lost if the stock rises there and is called away, but MATV shares would have to climb 5.9% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 14.1% return from this trading level, in addition to any dividends collected before the stock was called.