In the case of Home Depot Inc, looking at the dividend history chart for HD below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 2% annualized dividend yield. Selling the covered call at the $136 strike and collecting the premium based on the $2.79 bid, annualizes to an additional 19.3% rate of return against the current stock price (this is what we at Stock Options Channel refer to as the YieldBoost ), for a total of 21.4% annualized rate in the scenario where the stock is not called away. Any upside above $136 would be lost if the stock rises there and is called away, but HD shares would have to advance 0.5% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 2.6% return from this trading level, in addition to any dividends collected before the stock was called.