Helmerich & Payne Inc. Offers Options for Enhanced Returns
Exploring Income Boosts Through Covered Calls
Shareholders of Helmerich & Payne, Inc. (Symbol: HP) looking to increase their income beyond the stock’s current 2.9% annualized dividend yield can consider selling the March 2025 covered call at the $40 strike price. By doing so, they can collect a premium based on the $1.50 bid, which translates to an additional 10.2% rate of return against the current stock price. This method, referred to as YieldBoost by Stock Options Channel, can lead to a total annualized return of 13.1% if the stock is not called away. If HP shares appreciate above $40, the upside is forfeited. However, the stock would need to increase by 16.2% from present levels to reach that threshold. In that scenario, shareholders could realize a total return of 20.5%, factoring in any dividends received before the stock is called away.
The reliability of dividends can be unpredictable, as they typically fluctuate based on the company’s profitability. Analyzing Helmerich & Payne’s dividend history may provide insights into whether the latest dividend is sustainable, thereby helping investors assess the feasibility of a 2.9% annualized yield.
The chart below illustrates HP’s trailing twelve-month trading history, highlighting the $40 strike in red:
This chart, combined with an understanding of the stock’s historical volatility, can assist in weighing the risk and reward of selling the March 2025 covered call at the $40 strike. For Helmerich & Payne, the trailing twelve-month volatility, derived from the last 251 trading day closing values as well as today’s price of $34.19, stands at 36%. Investors looking for alternative call options can check out the HP Stock Options page on StockOptionsChannel.com.
In mid-afternoon trading on Wednesday, the put volume among S&P 500 components was 845,598 contracts, while call volume reached 1.47 million, yielding a put-to-call ratio of 0.58. This figure is lower than the long-term median put-to-call ratio of 0.65, indicating a higher preference for call options among traders so far today.
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Additional Resources:
- CASS market cap history
- IART shares outstanding history
- Institutional Holders of FCBC
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
