IPG Shareholders Consider Covered Call Strategy for Income

Interpublic Group (IPG) shareholders can enhance income with a covered call strategy, yielding a potential 43% return. While the annualized dividend yield stands at 4.9%, the call option strategy could provide additional benefits, depending on stock price movements.

Date: 12-02-2025

AI Rating: 7

Dividend Yield and Return Potential
Interpublic Group of Companies Inc. (IPG) offers an annualized dividend yield of 4.9%. Shareholders may leverage a covered call at the $28 strike price to increase their annualized return to 43%, assuming the stock is not called away. The call's premium of 25 cents represents a noteworthy income boost compared to the dividend alone.

The report highlights that while dividends can fluctuate based on profitability, the expectation of maintaining the 4.9% yield remains reasonable if historical trends support consistency. The current stock price of IPG is $26.71, which suggests a 5.1% increase is needed for the stock price to be called at $28.

Volatility and Options Trading
The analysis presents a trailing twelve-month stock volatility of 22% for IPG, indicating somewhat elevated price fluctuations, which may accompany trading strategies such as selling covered calls. High call volume observed today (2.07M vs. 1.17M for puts) suggests investor confidence in potential upside, which may drive interest in IPG’s options.

Stocks: IPG