YieldBoost Installed Building Products To 11% Using Options

Shareholders of Installed Building Products Inc (IBP) looking to boost their income beyond the stock's 0.6% annualized dividend yield can sell the March 2025 covered call at the $270 strike and collect the premium based on the $13.60 bid, which annualizes to an additional 10.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11% 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 IBP shares would have to climb 17% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 22.9% return from this trading level, in addition to any dividends collected before the stock was called.