Maximizing Income: Globe Life Inc’s Covered Call Strategy

Enhancing Returns on a Lower Dividend Yield

For shareholders of Globe Life Inc (Symbol: GL) seeking to enhance their income above the stock’s 0.9% annualized dividend yield, there is a potential strategy available. Selling the January 2026 covered call at the $120 strike allows investors to collect a premium, with a current bid of $12.70. This can provide an annualized return of 11.1% based on the current stock price. If the stock is not called away, this results in a total annualized return of 12%. However, if the stock price exceeds $120, shareholders would lose that upside. Notably, the stock needs to climb 7.4% before reaching that $120 threshold. In the event that the stock is called, the overall return could be as much as 18.8%, factoring in dividends amassed up to that point.

It’s important to remember that dividend amounts can fluctuate according to a company’s profitability. The following dividend history chart for Globe Life Inc will offer insight into whether the recent dividend payout is sustainable, and help assess the expectation of the 0.9% annualized dividend yield.

Next, we have a chart illustrating GL’s trailing twelve-month trading history, with the $120 strike marked in red:

The above chart, along with the stock’s historical volatility, can aid in determining whether selling the January 2026 covered call at the $120 strike presents a favorable risk-reward scenario. Currently, the trailing twelve-month volatility for Globe Life Inc—considering the last 251 trading day closing values and today’s price of $112.23—is calculated at 84%. For additional call options contract ideas across different expiration dates, check the GL Stock Options page on StockOptionsChannel.com.

In a recent mid-afternoon trading session on Tuesday, the put volume among S&P 500 components stood at 1.08M contracts, while call volume reached 2.62M, resulting in a put-call ratio of 0.41 for the day. This figure indicates a high preference for call options, particularly when compared to the long-term median put-call ratio of 0.65, highlighting heightened interest in calls among traders.

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