Alternative Strategies for Investing in DigitalBridge Group Shares

Investors eyeing DigitalBridge Group Inc (Symbol: DBRG) may want to explore selling puts as an alternative to purchasing shares at the current market price of $8.86 per share. One compelling option is the July 2026 put at the $8 strike price, with a current bid at $1.45. Collecting this premium offers an 18.1% return based on the $8 commitment, translating to a 15.1% annualized return, termed the YieldBoost by Stock Options Channel.

Understanding the Risks of Selling Puts

While selling a put can generate income, it does not provide the same upside potential as owning shares. The seller only acquires shares if the contract is exercised, which happens if the market price falls below $8. If DigitalBridge Group’s stock drops by 9.4% and the contract is executed, this would result in a cost basis of $6.55 per share (calculating the $1.45 premium from the $8 strike). Thus, the primary advantage for the put seller is the premium earned, yielding a 15.1% annualized rate of return.

Comparing Returns with Dividends

Interestingly, this annualized return exceeds DigitalBridge Group’s current dividend yield of 0.5% by 14.6%. If investors opt to buy shares to receive dividends, they expose themselves to greater downside risk, as the stock needs to fall 9.4% to hit the $8 strike price.

Dividend Predictability and Company Performance

Dividends are not always stable; they often fluctuate with the company’s profitability. Examining DigitalBridge Group’s dividend history can offer insights into whether its latest dividend payments are likely to continue. The chart below illustrates this history.

Price History and Volatility

Additionally, the chart of DigitalBridge Group’s trailing twelve-month trading history highlights the $8 strike price. This visual can serve as a reference for assessing whether the potential 15.1% annualized return from selling the puts justifies the associated risks.

DigitalBridge Group’s trailing twelve-month volatility is calculated at 51%, based on the last 250 trading days alongside the current stock price of $8.86. For additional put option strategies with varying expiration dates, consult the DBRG Stock Options page of StockOptionsChannel.com.

Market Activity Insights

In mid-afternoon trading on Tuesday, there were 989,148 put contracts and 1.21 million call contracts among S&P 500 components, yielding a put:call ratio of 0.82. This figure signifies a higher level of put buying than is typically observed, indicating a shift in market sentiment.

Top YieldBoost Puts of the S&P 500 »

Other Insights Available:

• PRU Technical Analysis
• Funds Holding NSC
• FCA Shares Outstanding History

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