Strategy To YieldBoost Wabtec From 0.4% To 11% Using Options

Shareholders of Wabtec Corp (WAB) looking to boost their income beyond the stock's 0.4% annualized dividend yield can sell the April 2025 covered call at the $210 strike and collect the premium based on the $9.00 bid, which annualizes to an additional 10.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11% annualized rate in the scenario where the stock is not called away. Any upside above $210 would be lost if the stock rises there and is called away, but WAB shares would have to climb 5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 9.6% return from this trading level, in addition to any dividends collected before the stock was called.