Boosting Income with DigitalBridge Group’s Covered Call Strategy

Shareholders of DigitalBridge Group Inc (Symbol: DBRG) aiming to enhance their income beyond the stock’s modest 0.3% annualized dividend yield may consider selling a covered call option. By opting for the March 2025 call at the $13 strike price, investors could collect a premium of $1.15. This strategy, referred to as YieldBoost, could annualize to an impressive 25% return based on the current stock price. If the stock remains below $13, this would result in a combined annualized yield of 25.3%. However, should the stock price exceed $13, shareholders would miss out on further gains. Currently, DBRG shares would need to rise 5.2% for that to occur, leading to a 14.5% return, plus any dividends accrued until the stock is called.

Predicting dividends can be uncertain, as they generally fluctuate with a company’s profitability. Analyzing DigitalBridge Group Inc’s dividend history can provide insight into whether the recent payout is likely to continue, thus making the 0.3% annualized yield a realistic expectation.

Illustrated below is a chart representing DBRG’s trailing twelve-month trading history, with the $13 strike price highlighted in red:

The provided chart and the stock’s historical volatility can help investors assess if selling the March 2025 covered call at the $13 strike presents a favorable risk-reward balance. Most options indeed expire worthless, but understanding these dynamics is essential. Currently, we calculate DigitalBridge Group Inc’s trailing twelve-month volatility at 45%. For a broader selection of call option opportunities across various expirations, check the DBRG Stock Options page on StockOptionsChannel.com.

During mid-afternoon trading on Tuesday, the S&P 500 noted put volume hitting 690,005 contracts, with call volume at 1.29 million, resulting in a put-call ratio of 0.54 for the day. This is significantly higher than the long-term median put-call ratio of 0.65, indicating a strong preference among buyers for call options in today’s trading.

Explore Top YieldBoost Calls of the S&P 500 »

Also see:

• WFC Shares Outstanding History
• ARES Historical Earnings
• PMD Split History

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Nasdaq, Inc.