YieldBoost Becton, Dickinson To 6.8% Using Options

Shareholders of Becton, Dickinson & Co (BDX) looking to boost their income beyond the stock's 1.6% annualized dividend yield can sell the January 2025 covered call at the $270 strike and collect the premium based on the $9.90 bid, which annualizes to an additional 5.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 6.8% annualized rate in the scenario where the stock is not called away. Any upside above $270 would be lost if the stock rises there and is called away, but BDX shares would have to advance 10.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 14.4% return from this trading level, in addition to any dividends collected before the stock was called.