Boosting Kohl’s Income: From 2.9% Dividend to 11.6% Yield via Covered Calls

Shareholders of Kohl’s Corp. (KSS) seeking extra income beyond the stock’s 2.9% annualized dividend can sell a December 2027 covered call with a $30 strike, collecting a $1.87 bid premium that annualizes to an additional 8.7%. Combined with the dividend, this yields a total of 11.6% if the shares remain below $30. Should the stock be called away, any upside above $30 is forfeited; however, the price would need to climb roughly 72% from today’s level to reach that point, leaving the shareholder with an 82.7% return (excluding dividends) in that scenario.

Dividend payments can vary with corporate profitability. Examining Kohl’s dividend‑history chart helps determine whether the current 2.9% yield is likely to continue.

The chart below shows Kohl’s trailing‑12‑month trading range, with the $30 strike highlighted in red.

These charts, together with the stock’s historical volatility, assist in assessing the risk‑reward of selling the December 2027 $30 call. Based on the last 251 trading‑day closes and the current price of $17.44, Kohl’s trailing 12‑month volatility is approximately 70%.

During Thursday’s afternoon session, S&P 500 put volume totaled 2.42 million contracts while call volume reached 4.11 million, yielding a put‑call ratio of 0.59. This is below the long‑term median of 0.65, indicating a relative preference for call options among traders today.

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