YieldBoost CIVI To 13.3% Using Options

Shareholders of Civitas Resources Inc (CIVI) looking to boost their income beyond the stock's 4% annualized dividend yield can sell the April 2025 covered call at the $57.50 strike and collect the premium based on the $2.55 bid, which annualizes to an additional 9.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.3% annualized rate in the scenario where the stock is not called away. Any upside above $57.50 would be lost if the stock rises there and is called away, but CIVI shares would have to climb 16% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 21.2% return from this trading level, in addition to any dividends collected before the stock was called.