Boost Your TEGNA Investment with Covered Calls
For TEGNA Inc (Symbol: TGNA) investors seeking to enhance their income, an attractive strategy might involve selling covered calls.
Shareholders currently experiencing a 2.9% annualized dividend yield could consider selling a December 2025 covered call at a $20 strike price. This action allows them to collect a premium at a $1.45 bid, translating to an additional 7.5% annual return against the current stock price. Should the stock not be called, the total potential yield rises to 10.3% annually. However, if the stock price surpasses $20, the upside potential would be forfeited. Since TGNA shares would need to increase by 15.5% for this to happen, shareholders can still realize a considerable return of 23.8%, plus any dividends before the stock is called away.
Dividend payouts can sometimes be unpredictable and are closely linked to each company’s profitability. For TEGNA Inc, examining the dividend history can assist investors in assessing the likelihood of maintaining the 2.9% yield.
A detailed chart displays TGNA’s trailing twelve-month trading history, with the $20 strike prominently marked in red:
The provided chart, in conjunction with the stock’s historical volatility, assists in evaluating whether the December 2025 covered call at the $20 strike presents a favorable risk-reward scenario. Historical data shows that most options might expire worthless, which underscores the importance of fundamental analysis in making these decisions. The trailing twelve-month volatility for TEGNA Inc stands at 29%, calculated using the last 251 trading days and the current price of $17.48. For additional call options ideas across various expirations, please visit the TGNA Stock Options page on StockOptionsChannel.com.
During mid-afternoon trading on Wednesday, S&P 500 components saw put volume at 1.57 million contracts and call volume at 3.06 million, resulting in a put:call ratio of 0.51. This marks a significant shift towards call options compared to the long-term median ratio of 0.65, indicating a stronger buyer preference for call options in today’s trading.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
