Shareholders of Northrop Grumman Corp (NOC) looking to boost their income beyond the stock's 1.6% annualized dividend yield can sell the January 2027 covered call at the $660 strike and collect the premium based on the $35.40 bid, which annualizes to an additional 4.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 6.2% annualized rate in the scenario where the stock is not called away. Any upside above $660 would be lost if the stock rises there and is called away, but NOC shares would have to climb 13.4% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 19.5% return from this trading level, in addition to any dividends collected before the stock was called.

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