Strategy To YieldBoost Dine Brands Global From 6.2% To 24.9% Using Options

Shareholders of Dine Brands Global Inc (DIN) looking to boost their income beyond the stock's 6.2% annualized dividend yield can sell the December covered call at the $35 strike and collect the premium based on the $2.80 bid, which annualizes to an additional 18.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 24.9% annualized rate in the scenario where the stock is not called away. Any upside above $35 would be lost if the stock rises there and is called away, but DIN shares would have to climb 5.7% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 14.2% return from this trading level, in addition to any dividends collected before the stock was called.