YieldBoost ALGT To 18.6% Using Options

Shareholders of Allegiant Travel Company (ALGT) looking to boost their income beyond the stock's 5.3% annualized dividend yield can sell the January 2025 covered call at the $55 strike and collect the premium based on the $3.20 bid, which annualizes to an additional 13.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 18.6% 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 ALGT shares would have to advance 21.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 28.4% return from this trading level, in addition to any dividends collected before the stock was called.