YieldBoost Coca-Cola Enterprises To 6.9% Using Options

Shareholders of Coca-Cola Enterprises Inc (CCE) looking to boost their income beyond the stock's 2.2% annualized dividend yield can sell the May 2016 covered call at the $55 strike and collect the premium based on the $1.15 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 6.9% annualized rate in the scenario where the stock is not called away. Any upside above $55 would be lost if the stock rises there and is called away, but CCE shares would have to climb 8.8% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 11.1% return from this trading level, in addition to any dividends collected before the stock was called.