Maximizing Income with Healthpeak Properties: An Analysis of Covered Calls

Exploring Additional Income Strategies

Shareholders of Healthpeak Properties Inc (Symbol: DOC) may want to explore ways to enhance their earnings beyond the stock’s current 5.7% annualized dividend yield. One option is to sell the April 2025 covered call at the $22.50 strike price. If this strategy is executed, investors could secure a premium of 50 cents, which equates to an annualized return of 7.2% based on the current stock price. Should the stock remain uncalled, shareholders could see a combined annualized rate of 12.9%. However, any gain above $22.50 would be forfeited if the shares are called away. Given that DOC must rise 7.2% for this scenario, even if called, shareholders could realize a 9.6% return alongside any dividends collected prior to the call.

The Importance of Monitoring Dividend History

Predicting dividend amounts can be tricky since they often fluctuate based on a company’s profitability. To assess Healthpeak Properties Inc’s dividend sustainability, examining the dividend history chart for DOC below is invaluable:

Tracking DOC’s Trading Performance

Displayed below is a chart detailing DOC’s trailing twelve-month trading history, with the $22.50 strike price shown in red:

This chart, combined with the stock’s historical volatility, serves as a useful tool for evaluating whether selling the covered call at the $22.50 strike price is a worthwhile trade-off, considering the associated risks of giving up potential upside. The trailing twelve-month volatility for Healthpeak Properties Inc—derived from the last 251 trading day closing values alongside today’s price of $21.08—currently stands at 23%. For additional options contracts and ideas with varying expiration dates, visit the DOC Stock Options page available on StockOptionsChannel.com.

Trading Activity Insights

During mid-afternoon trading on Tuesday, the put volume among S&P 500 components amounted to 1.37M contracts, while call volume reached 2.68M, resulting in a put:call ratio of 0.51. Compared to the long-term median put:call ratio of 0.65, this indicates a significantly higher preference for call options in today’s trading environment.

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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.