Strategy To YieldBoost MGPI To 6.4% Using Options

Shareholders of MGP Ingredients Inc (MGPI) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the December 2025 covered call at the $70 strike and collect the premium based on the $2.70 bid, which annualizes to an additional 5.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 6.4% annualized rate in the scenario where the stock is not called away. Any upside above $70 would be lost if the stock rises there and is called away, but MGPI shares would have to advance 50.7% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 56.5% return from this trading level, in addition to any dividends collected before the stock was called.