Devon Energy Corp. (DVN) has seen unusual call option activity, potentially in anticipation of a dividend hike upon the Q4 earnings release on Feb. 17. The stock is currently trading at $38.15, up from $34.47 in early January. Investors have been buying call options contracts that expire on Jan. 23 with a strike price of $40.

Investors may be bullish on DVN stock’s prospects, with the potential for a dividend hike given the company’s track record of dividend growth. The quarterly dividend per share could rise to 26 cents from the current 24 cents, leading to an annual DPS payment of $1.04. This could result in a dividend yield of 2.73%, suggesting upside potential for the stock.

Based on historical dividend yields, DVN stock could have a price target of $40.47, representing a 6.0% increase from the current price. Investors buying out-of-the-money call options may be anticipating further gains. Existing investors could potentially earn a 9-day yield of 0.97% and a total return of almost 6% by selling their shares above $40. This activity indicates a bullish outlook for DVN stock in the near term.

Read more at Barchart: Devon Energy Unusual Call Option Activity