For a look at what options traders think about a stock, the put/call ratio is a great tool. Because put options become profitable when a stock falls and call options are profitable as a stock rises, the put/call ratio rises on negative sentiment and falls on positive sentiment.
Looking at the sentiment on dividend stocks, we screened dividend stocks for those with significant decreases in put/call over the last ten trading days (a bullish change).
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you agree with the bullish outlook on these stocks? Use this list as a starting point for your own analysis.
List sorted by decrease in put/call.
1. Waddell & Reed Financial Inc. (WDR): Provides investment management, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. Market cap of $2.30B. Dividend yield at 2.96%, payout ratio at 37.87%. Put/Call ratio changed from 0.10 to 0.03 between 11/02/11 and 11/16/11, a change of -70.0%. Might be undervalued at current levels, with a PEG ratio at 0.89, and P/FCF ratio at 14.06. The stock has lost 8.44% over the last year.
2. Staples, Inc. (SPLS): Operates as an office products company. Market cap of $10.21B. Dividend yield at 2.78%, payout ratio at 36.27%. Put/Call ratio changed from 0.54 to 0.31 between 11/02/11 and 11/16/11, a change of -42.59%. Might be undervalued at current levels, with a PEG ratio at 0.81, and P/FCF ratio at 12.58. The stock has lost 26.68% over the last year.
3. Ternium S.A. (TX): Engages in manufacturing and processing a range of flat and long steel products for construction, home appliances, capital goods, container, food, energy, and automotive industries. Market cap of $5.05B. Dividend yield at 2.98%, payout ratio at 10.31%. Put/Call ratio changed from 0.11 to 0.08 between 11/02/11 and 11/16/11, a change of -27.27%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock has had a good month, gaining 14.81%.
4. H&R Block, Inc. (HRB): Provides tax preparation, retail banking, and various business advisory and consulting services. Market cap of $4.74B. Dividend yield at 3.87%, payout ratio at 49.41%. Put/Call ratio changed from 0.40 to 0.30 between 11/02/11 and 11/16/11, a change of -25.0%. The stock has gained 30.69% over the last year.
*Options data sourced from Schaeffer’s, all other data sourced from Finviz.