How To YieldBoost Comcast Corp From 1.6% To 4% Using Options

Shareholders of Comcast Corp (CMCSA) looking to boost their income beyond the stock's 1.6% annualized dividend yield can sell the January 2017 covered call at the $72.50 strike and collect the premium based on the $2.19 bid, which annualizes to an additional 2.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4% annualized rate in the scenario where the stock is not called away. Any upside above $72.50 would be lost if the stock rises there and is called away, but CMCSA shares would have to climb 16.3% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 19.8% return from this trading level, in addition to any dividends collected before the stock was called.