TechnipFMC YieldBoost: Sell January 2027 Covered Call to Boost Income

TechnipFMC plc (FTI) shareholders can boost their income by selling the January 2027 covered call at $40, yielding 7.2% annualized. The stock would need to rise 29.4% to $40 for the call to be triggered, resulting in a 40.1% return. The dividend yield is currently 0.7%.

TechnipFMC plc (FTI) shareholders seeking to enhance their income beyond the stock's current 0.7% annualized dividend yield can consider selling the January 2027 covered call at the $40 strike price. This strategy can yield an additional 7.2% annualized income. For the call to be triggered, the stock would need to rise 29.4% to $40, resulting in a 40.1% return on the investment [2].

The covered call strategy involves selling call options on a stock that the investor owns, in exchange for receiving a premium. If the stock price does not reach the strike price by the expiration date, the investor keeps the premium and the stock. If the stock price exceeds the strike price, the investor is obligated to sell the stock at the strike price, but they still keep the premium.

For FTI shareholders, selling the January 2027 covered call at the $40 strike would generate a premium of $3.30, which annualizes to an additional 6.5% income. This premium is based on the current bid price of the call option [2].

The covered call strategy can be particularly attractive for investors who are bullish on the stock but want to generate additional income. However, it is essential to understand the risks involved. If the stock price rises significantly, the investor may miss out on further gains. Additionally, if the stock price falls below the strike price, the investor will still keep the premium but may face potential losses if they decide to sell the stock at a lower price.

TechnipFMC plc (FTI) has been receiving a moderate buy rating from analysts, with an average 1-year price objective of $36.46. The stock has recently experienced positive adjustments to its Relative Strength (RS) Rating, which identifies technical performance by showing how a stock's price action over the last 52 weeks measures up against that of other stocks on the major indexes [3].

Institutional investors have also shown interest in FTI, with several major institutions recently increasing their stakes in the company. Additionally, insiders have been selling shares, but the overall sentiment remains positive [1].

Before implementing a covered call strategy, investors should carefully consider their risk tolerance and investment goals. It is also crucial to monitor the stock price and the options market to make informed decisions about when to sell the call options and when to exercise the options if they are in the money.

References:
[1] https://www.marketbeat.com/instant-alerts/technipfmc-plc-nysefti-given-average-recommendation-of-moderate-buy-by-analysts-2025-05-27/
[2] https://proinvestor.com/investornyt/1322173/yieldboost-fti-to-72-using-options
[3] https://www.investors.com/ibd-data-stories/technipfmc-clears-technical-benchmark-hitting-80-plus-rs-rating/