How To YieldBoost Safehold From 0.9% To 13.6% Using Options

Shareholders of Safehold Inc (SAFE) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the April 2022 covered call at the $80 strike and collect the premium based on the $4.30 bid, which annualizes to an additional 12.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.6% annualized rate in the scenario where the stock is not called away. Any upside above $80 would be lost if the stock rises there and is called away, but SAFE shares would have to climb 4.7% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 10.3% return from this trading level, in addition to any dividends collected before the stock was called.