YieldBoost Deluxe To 18.9% Using Options

Shareholders of Deluxe Corp (DLX) looking to boost their income beyond the stock's 5.2% annualized dividend yield can sell the July 2025 covered call at the $25 strike and collect the premium based on the $2.00 bid, which annualizes to an additional 13.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 18.9% annualized rate in the scenario where the stock is not called away. Any upside above $25 would be lost if the stock rises there and is called away, but DLX shares would have to advance 6.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 15.5% return from this trading level, in addition to any dividends collected before the stock was called.