Maximizing ManpowerGroup Income: How a Covered Call Strategy Could Generate 15.5% Annual Returns

For ManpowerGroup Inc (MAN) investors, the standard 4.8% dividend yield may feel underwhelming in today’s market. But there’s a tactical approach using options that could significantly amplify your returns. By writing an October 2026 covered call at the $35 strike—accepting the $2.70 premium bid—investors could potentially earn an additional 10.8% annualized income on top of dividends, reaching a combined 15.5% annual return if the shares remain uncalled.

Breaking Down the Opportunity

The mechanics are straightforward: you own MAN shares (currently trading around $30.25) and sell a call option, collecting the premium upfront. This premium translates to 10.8% annualized yield based on the current price. Combined with the existing 4.8% dividend, total potential annual income reaches 15.5%—a meaningful enhancement for income-focused portfolios.

The trade-off is clear: if MAN shares appreciate beyond the $35 strike price, your shares will likely be called away at assignment. However, the math is compelling here. The stock would need to climb 15.4% from current levels to reach that strike. In the scenario where assignment occurs, you still capture a 24.3% total return from your entry point, plus any dividends collected along the way—hardly a disappointing outcome.

Historical Context and Volatility

Understanding ManpowerGroup’s volatility is essential for this strategy. At 46% trailing twelve-month volatility (calculated using 250 trading days plus today’s price), MAN exhibits moderate-to-high price swings. This elevated volatility actually works in the options seller’s favor, supporting the premium level available at the $35 strike.

The dividend history for MAN should also inform your decision. While dividend yields can fluctuate with company profitability, ManpowerGroup’s dividend track record provides a baseline for assessing whether the 4.8% current yield is likely sustainable.

Market Sentiment Backdrop

At the time of analysis, put volume across S&P 500 components stood at 1.33M contracts with call volume at 2.26M, yielding a put-to-call ratio of 0.59. This ratio compares favorably against the long-term median of 0.65, suggesting buyers are tilted toward calls—indicating bullish positioning overall. This environment can support premium collection strategies.

Risk Considerations

The primary risk remains opportunity cost if MAN rallies significantly above $35. Investors must decide whether locking in a 15.5% annual return is preferable to unlimited upside potential. Additionally, while dividends have historically been paid, they’re not guaranteed and can fluctuate based on earnings performance.

For traders exploring similar covered call structures across different expirations and strikes, analyzing the stock’s historical twelve-month price action combined with current volatility levels provides a useful framework for assessing reward-to-risk ratios on any covered call position.