Maximizing Income: Exploring Covered Calls with Republic Services Inc.
Boosting Returns Beyond Dividends
Shareholders of Republic Services Inc (Symbol: RSG) seeking to enhance their income, beyond the stock’s 1.1% annual dividend yield, can consider selling a covered call option for December 2025 at a $230 strike price. By doing so, they could collect a premium priced at $9.00, translating to an additional 3.7% return, leading to a total annualized return of 4.9% if the stock remains uncalled. However, if the stock appreciates beyond $230, any additional profits would be forfeited. With RSG shares needing to rise 12.1% for this to happen, shareholders have the potential to realize a 16.5% return, factoring in dividends collected before the call.
Understanding Dividend Trends
Dividends can fluctuate based on a company’s profitability, making them unpredictable. For Republic Services Inc, reviewing the dividend history chart below may provide insight into the likelihood of the recent dividend yield—currently set at 1.1%—continuing.
Analyzing Trading History
The chart below illustrates RSG’s trading performance over the trailing twelve months, with the $230 strike price highlighted in red:
Considering the historical performance and volatility of the stock provides valuable context for deciding whether selling the December 2025 covered call at a $230 strike offers a worthwhile reward given the risk of missing out on further gains beyond that price. With a trailing twelve-month volatility calculated at 14%—based on the last 251 trading days and the current price of $205.28—potential investors can assess their options further on the RSG Stock Options page at StockOptionsChannel.com.
Current Trading Activity
On Wednesday afternoon, data showed 845,598 put contracts and 1.47 million call contracts among S&P 500 components, resulting in a put-to-call ratio of 0.58 for the day. This statistic indicates a higher preference for call options compared to puts, contrasting with the long-term median put-call ratio of 0.65.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
