Maximizing Income: A Deep Dive into Greenbrier Companies Inc’s Yield Strategies

Exploring Covered Calls for Enhanced Returns

Shareholders of Greenbrier Companies Inc (Symbol: GBX) aiming to increase their income beyond the stock’s 1.8% annual dividend yield have an opportunity with a covered call strategy. By selling a June 2025 covered call at a $72.50 strike price, investors can collect a premium based on the $5.40 bid price. This approach offers an approximate additional return of 13.5% annualized based on the current stock price. If the stock isn’t called away, this combined with the existing yield totals a potential 15.3% annualized income. However, if the stock rises beyond $72.50, that upside would not be realized. Currently, GBX would need to appreciate 8.4% for the stock to reach that call level, enabling shareholders to secure a total return of 16.5% prior to the stock being called, in addition to any dividends earned before the call occurs.

Typically, dividends can fluctuate due to a company’s profitability, making precise predictions challenging. For investors in Greenbrier Companies Inc, examining the dividend history of GBX could provide insights into the likelihood of continued dividends and establish whether the 1.8% yield is a reasonable expectation.

The accompanying chart illustrates GBX’s trading history over the past twelve months, emphasizing the $72.50 strike in red.

Utilizing the aforementioned chart along with the stock’s historical volatility can assist investors in evaluating whether selling the June 2025 covered call at the $72.50 strike price justifies the potential risk of missing out on gains above that level. Currently, the trailing twelve-month volatility for Greenbrier Companies Inc is calculated at 36%, based on the last 251 trading day closing values, including today’s price of $66.62. To explore more options strategies, visit the GBX Stock Options page on StockOptionsChannel.com.

During midday trading on Thursday, the S&P 500 saw a put volume of 981,376 contracts paired with call volume of 1.82 million, producing a put:call ratio of 0.54 for the day. This contrasts with a long-term median put:call ratio of 0.65, indicating a notable preference for calls over puts among traders today.

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Also see:

· Low PE Ratios
· AVRO Historical Stock Prices
· Funds Holding OMNT

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