Exploring Income Boosts for Krispy Kreme Shareholders Through Options

Shareholders of Krispy Kreme Inc (Symbol: DNUT) seeking to increase their income beyond the stock’s current 4.1% annualized dividend yield can consider selling the January 2026 covered call at the $5 strike price. By doing so, they can collect a premium based on the 30 cents bid, which annualizes to an additional 12.7% return when compared to the current stock price. This approach, referred to as a YieldBoost, could result in a total annualized return of 16.8%, provided that the stock is not called away.

However, it’s essential to note that any gains beyond $5 would be forfeited if the stock rises above this level and is called away. For DNUT shares to be called, they would need to appreciate by 46.6% from current levels. In that scenario, shareholders would still achieve a 55.4% return, in addition to any dividends collected prior to the stock being called.

Dividend History Insight

Dividend payments can fluctuate, often reflecting the company’s profitability. To better assess the likelihood of maintaining the 4.1% dividend yield, examining Krispy Kreme’s dividend history is beneficial. Below is a dividend history chart for DNUT:

Trading Performance Overview

The chart below illustrates DNUT’s trailing twelve-month trading performance, with the $5 strike price marked in red:

This chart, along with DNUT’s historical volatility, can provide insights when analyzing whether selling the January 2026 covered call is a prudent decision for potential returns relative to the risk of losing upside more than $5. The trailing twelve-month volatility for Krispy Kreme, based on the last 250 trading days and the current price of $3.40, stands at 59%.

Market Activity Insights

During mid-afternoon trading on Thursday, the put volume among S&P 500 components reached 908,967 contracts, while call volume was at 1.99M, resulting in a put:call ratio of 0.46. This figure indicates high call volume relative to puts, suggesting that buyers are leaning towards calls in the options trading landscape today.

For other call options contract ideas at various expiration dates, investors can visit the DNUT stock options page for more information.

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