YieldBoost MNRO From 4.2% To 16.6% Using Options

Shareholders of Monro Inc (MNRO) looking to boost their income beyond the stock's 4.2% annualized dividend yield can sell the January 2025 covered call at the $30 strike and collect the premium based on the $1.10 bid, which annualizes to an additional 12.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 16.6% annualized rate in the scenario where the stock is not called away. Any upside above $30 would be lost if the stock rises there and is called away, but MNRO shares would have to advance 11.4% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 15.5% return from this trading level, in addition to any dividends collected before the stock was called.