A classic strategy that could yield big dividends

Wednesday is trash day where I live, and because of how recycling works here, we have four separate bins. One for solid waste, one for “containers” (bottles and cans), one for compost (basically grass clippings), and one for paper. These last two are the largest, but still the one for paper is never big enough. We now receive everything and everything delivered comes in a box. Of course, today, no matter how much I folded and stuffed, most of the cardboard remained next to the paper box when there was no room left inside… which got me thinking.

Packaging Company of America (PKG) is an old-style, brick-and-mortar industrial operation. They produce corrugated boxes, cartons and shipping materials. It may not sound like a relic of the past (the company’s origins go back more than a century), but consider how the world actually works right now.

We live in a new era dominated by digital commerce. Every click on a mobile app, every online shopping spree, and every supply chain shipment comes down to one thing: a box. Technology can create order, but the old industrialists are packaging it. The eye-catching thing currently sitting on my sidewalk.

The stock is up a relatively modest 9% in 2026, but management has increased the annual dividend by 20% to $6.00 per share, and the consensus on the street is that the company will earn 12.30 in adjusted earnings per share next year – roughly 18% annual growth. Since the stock trades around $225, you’ll get a solid return. But why sit there and take a standard payout in a volatile, adverse macro environment? You can strengthen this old economy horse by using a classic, simple (dare I say “box stock”) buy-write strategy.

We actually have a “double distribution” fund. Here’s an example of how you can generate a “double dividend.”

Here is the game:

• Stock: Buy shares of Packaging Corp of America (PKG) at the current market price of approximately $225.
• Choice: sell (write) at the same time July $250 Search against your shares.
• Premium: Target the following selling price: $2.25 per contract.
• Skill level: Novice

By collecting this $2.25 option premium, you immediately pocket a cash return equal to roughly 1% of the stock price in about 6 weeks.

Consider the math here. You buy the underlying stock, position yourself for the newly increased quarterly dividend payment of $1.50, and multiply the additional $2.25 in pure option income. If the stock trades steady or rises moderately, that premium remains yours, allowing you to effectively double the income that name generates. Buy writing is also a great entry strategy for anyone looking to make their first options trade.

What if the market catches fire and PKG surpasses $250 by the end of July? You are being called. But guess what? You just received an 11% capital gain from equity appreciation on top of your bonus and dividend, so we can recycle another option strategy to get back to our name.