Shareholders of B&G Foods Inc (BGS) looking to boost their income beyond the stock's 6.9% annualized dividend yield can sell the January 2025 covered call at the $12.50 strike and collect the premium based on the $1.05 bid, which annualizes to an additional 12.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.2% annualized rate in the scenario where the stock is not called away. Any upside above $12.50 would be lost if the stock rises there and is called away, but BGS shares would have to climb 13.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 23.1% return from this trading level, in addition to any dividends collected before the stock was called.

Start slideshow:
Top YieldBoost Calls of the S&P 500 »

In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of B&G Foods Inc, looking at the dividend history chart for BGS below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 6.9% annualized dividend yield.

Below is a chart showing BGS's trailing twelve month trading history, with the $12.50 strike highlighted in red: