Get Paid 11% A Year To Cap Your HEI Stock At 14% Higher

Here’s how to get paid a meaningful cash income now on your Heico shares, income you keep no matter what, in exchange for agreeing to sell at a price above today’s.

Heico (HEI) has been a steady performer, and right now it sits near its 52-week high. For shareholders, that’s a comfortable spot, but it also tees up a classic question: what now? One answer is to turn those shares into a cash-paying asset, right now, without selling them. The trade below lays out exactly how to do that, generating an immediate income stream you keep regardless of what the stock does next.

11% annualized income on HEI shares you already own, with 14% of upside room, by selling a covered call.

• You own (or buy) 100 shares of HEI near today’s price of $367.58.
• Sell one call option on HEI expiring 2/19/2027, with a strike price of $420, about 14% above today.
• Collect roughly $2,105 in premium up front per contract (each contract covers 100 shares), which you keep no matter what the stock does.
• That premium is about 10.9% annualized on the $36,758 of stock, income you earn just for holding.
• If HEI finishes above $420, your shares are called away at $420. Counting the premium, your total return works out to about 40% annualized, but you give up any gains above the strike.

Either Way, The Premium Is Yours To Keep

If HEI finishes below $420 on 2/19/2027, the call expires worthless, and you keep the full $2,105 premium and all your shares. That is about 5.7% over 196 days, income earned just for holding, and you are free to sell another call.

If HEI finishes above $420, your 100 shares are called away at $420. You still keep the $2,105 premium, and counting it your total gain works out to about 20% over the holding period (about 40% annualized), a healthy exit. The cost of the trade is that any gain above $420 is no longer yours. And if the stock instead falls, you keep the premium but still ride the shares down, cushioned only slightly.

How Much Upside Would You Really Be Giving Up?

The only real cost is capping your upside, so the decision boils down to this: how much blue sky are you really giving up? The case for Heico continuing its climb is straightforward. Management says the business is “firing on all engines,” with customers who “are, I would literally use the word clamoring for more parts.” Add to that a defense business with what the company sees as a “multiyear tail,” and you have a recipe for further gains. If that momentum is the real story, capping your upside means leaving potential profit on the table.

But there’s a credible counterargument that the best of the run is already in the rearview mirror. Skeptics on the company’s last earnings call raised the idea of a “peak aftermarket” moment, questioning if the company has been over-earning. The last quarter’s stellar results, for instance, were helped by a customer pulling forward between $15 million and $20 million in defense sales. That’s a timing benefit, not a recurring tailwind. And while recent performance is strong, the company’s trailing revenue growth of 18.8% marks a deceleration from its 26% three-year average. For investors who see a high-quality but fully-valued business, this trade offers a way to get paid for that view.

Ultimately, this trade is a judgment call on that very tension. If you believe the operational momentum is durable, you might let your shares run free. But if you suspect the recent surge was flattered by good timing and would be content with a solid, capped return, then collecting that upfront income payment is a strong move. The metric to watch is organic growth in the Flight Support Group; that’s where you’ll see if underlying demand can truly sustain the pace.

How Much Could The Stocks You Hold Pay You?

You may not own HEI, but you almost certainly own something that could be paying you. Our Covered Call Finder lets you type in a stock, or a few, and instantly see the income a covered call could generate on each, then dial the strike up or down with a slider to balance more income against more upside. It is the quickest way to see what the names in your own portfolio could pay.

One Name, One Theme, Or The Whole Market

There is a ladder here. A covered call earns income on one company. A sector fund spreads that across one theme. Neither escapes the risk that a single industry hits a rough patch. The next rung is a core built across every sector, so the whole thing never rides on one bet.

The Trefis High Quality (HQ) Portfolio is that rung: about 30 quality businesses across sectors, each weighed on the full sweep of its fundamentals, sized and re-balanced with discipline. It has a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Use the call for income on names you like; let a diversified, cross-sector core carry the long game.