Packaging Corp of America (PKG), a manufacturer of corrugated boxes and shipping materials, is experiencing a modest stock increase of 9% in 2026. The company has raised its annual dividend by 20% to $6.00 per share, with analysts projecting an adjusted earnings per share (EPS) of $12.30 for the next year, indicating an 18% year-over-year growth.
Currently trading around $225, PKG offers a solid yield, but investors are encouraged to consider a buy-write strategy to enhance income. This involves purchasing shares at the current price and simultaneously selling a July $250 call option for a premium of $2.25 per contract.
This strategy could yield an immediate cash return of approximately 1% of the stock price in about six weeks, while also allowing investors to benefit from the increased dividend. If the stock price rises above $250 by the option's expiration, investors would realize an 11% capital gain in addition to the premium and dividend.
This approach not only provides a way to maximize income but also serves as an accessible entry point for those new to options trading