Investors Buy Large Volume of Call Options on Eaton (NYSE:ETN)

Key Points

• On Friday, traders purchased 60,397 call options for Eaton Corporation (NYSE:ETN), a substantial increase of 1,112% compared to its usual volume.
• Eaton shares rose 1.0% on the same day, closing at $388.83, with the company achieving a market cap of $152.15 billion.
• The company announced a quarterly dividend of $1.04 per share, resulting in an annual yield of 1.07%.
• Eaton has received mostly positive analyst ratings, with fifteen buy ratings compared to six hold ratings, and an average target price of $377.89.

Eaton Corporation, PLC (NYSE:ETN - Get Free Report) was the target of unusually large options trading activity on Friday. Stock traders bought 60,397 call options on the company. This represents an increase of 1,112% compared to the typical daily volume of 4,983 call options.

Analyst Upgrades and Downgrades

A number of research analysts have issued reports on the stock. Sanford C. Bernstein restated an "outperform" rating and set a $396.00 target price on shares of Eaton in a research report on Monday, July 14th. BNP Paribas assumed coverage on shares of Eaton in a research report on Thursday, May 15th. They set an "outperform" rating and a $380.00 target price on the stock. Barclays upped their target price on shares of Eaton from $323.00 to $340.00 and gave the company an "equal weight" rating in a research report on Wednesday, July 9th. JPMorgan Chase & Co. upped their target price on shares of Eaton from $300.00 to $360.00 and gave the company an "overweight" rating in a research report on Friday, May 16th. Finally, Royal Bank Of Canada upped their target price on shares of Eaton from $336.00 to $356.00 and gave the company an "outperform" rating in a research report on Monday, May 5th. Six research analysts have rated the stock with a hold rating and fifteen have assigned a buy rating to the company's stock. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $377.89.

Eaton Stock Up 1.0%

Shares of NYSE:ETN traded up $3.93 during midday trading on Friday, hitting $388.83. The stock had a trading volume of 461,228 shares, compared to its average volume of 3,062,706. The company has a quick ratio of 0.84, a current ratio of 1.31 and a debt-to-equity ratio of 0.41. The business's 50-day simple moving average is $343.32 and its 200-day simple moving average is $315.89. Eaton has a 12 month low of $231.85 and a 12 month high of $391.36. The company has a market cap of $152.15 billion, a P/E ratio of 39.24, a PEG ratio of 2.87 and a beta of 1.17.

Eaton (NYSE:ETN - Get Free Report) last announced its earnings results on Friday, May 2nd. The industrial products company reported $2.72 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.70 by $0.02. The company had revenue of $6.38 billion during the quarter, compared to analysts' expectations of $6.26 billion. Eaton had a net margin of 15.55% and a return on equity of 23.41%. Eaton's quarterly revenue was up 7.3% on a year-over-year basis. During the same quarter in the previous year, the business posted $2.40 earnings per share. On average, sell-side analysts forecast that Eaton will post 12.02 earnings per share for the current fiscal year.

Eaton Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, August 22nd. Investors of record on Thursday, August 7th will be paid a $1.04 dividend. This represents a $4.16 dividend on an annualized basis and a yield of 1.07%. The ex-dividend date of this dividend is Thursday, August 7th. Eaton's dividend payout ratio (DPR) is presently 41.98%.

Insider Buying and Selling

In other news, insider Michael Yelton sold 2,120 shares of the business's stock in a transaction on Tuesday, May 6th. The shares were sold at an average price of $296.87, for a total value of $629,364.40. Following the completion of the sale, the insider directly owned 3,382 shares in the company, valued at approximately $1,004,014.34. The trade was a 38.53% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Craig Arnold sold 103,486 shares of the stock in a transaction on Monday, May 12th. The shares were sold at an average price of $322.75, for a total transaction of $33,400,106.50. Following the completion of the transaction, the insider owned 490,208 shares of the company's stock, valued at approximately $158,214,632. This represents a 17.43% decrease in their position. The disclosure for this sale can be found here. Insiders sold a total of 156,660 shares of company stock worth $49,622,894 over the last quarter. Insiders own 0.30% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of ETN. Commonwealth Financial Services LLC increased its stake in shares of Eaton by 2.9% in the first quarter. Commonwealth Financial Services LLC now owns 1,175 shares of the industrial products company's stock valued at $319,000 after buying an additional 33 shares during the period. E Fund Management Co. Ltd. increased its stake in shares of Eaton by 3.1% in the first quarter. E Fund Management Co. Ltd. now owns 1,091 shares of the industrial products company's stock valued at $297,000 after buying an additional 33 shares during the period. Beaumont Financial Advisors LLC increased its stake in shares of Eaton by 2.6% in the second quarter. Beaumont Financial Advisors LLC now owns 1,307 shares of the industrial products company's stock valued at $467,000 after buying an additional 33 shares during the period. SOA Wealth Advisors LLC. increased its stake in shares of Eaton by 36.0% in the second quarter. SOA Wealth Advisors LLC. now owns 136 shares of the industrial products company's stock valued at $49,000 after buying an additional 36 shares during the period. Finally, Checchi Capital Advisers LLC increased its stake in shares of Eaton by 0.7% in the first quarter. Checchi Capital Advisers LLC now owns 5,071 shares of the industrial products company's stock valued at $1,378,000 after buying an additional 37 shares during the period. Institutional investors and hedge funds own 82.97% of the company's stock.

Eaton Company Profile

Eaton Corporation plc operates as a power management company worldwide. The company's Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems.

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