Shareholders of REV Group Inc (REVG) looking to boost their income beyond the stock's 0.5% annualized dividend yield can sell the January 2026 covered call at the $60 strike and collect the premium based on the $2.45 bid, which annualizes to an additional 10.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.2% annualized rate in the scenario where the stock is not called away. Any upside above $60 would be lost if the stock rises there and is called away, but REVG shares would have to advance 26.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 31.3% return from this trading level, in addition to any dividends collected before the stock was called.

Read full article here »