KBE Dividend Type Payments
Although KBE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street SPDR S&P Bank ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| State Street SPDR S&P Bank ETF (KBE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 62.62 |
62.67 |
62.62 |
-0.14 |
2.0M |
- |
5.0B |
KBE Dividend-Like Income Using Covered Calls
With KBE at 62.62, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:
| Annual Yield |
Annual Premium |
Cents/Day |
| 3% |
1.88 |
0.5 |
| 5% |
3.13 |
0.9 |
| 10% |
6.26 |
1.7 |
So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:
| 3% Yield On KBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
63.00 |
0.40 |
29 |
1.4 |
0.33 (0.5%) |
| Jan 15 |
63.00 |
4.00 |
393 |
1.0 |
0.33 (0.5%) |
| 5% Yield On KBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
63.00 |
0.40 |
29 |
1.4 |
0.33 (0.5%) |
| Jan 15 |
63.00 |
4.00 |
393 |
1.0 |
0.33 (0.5%) |
| 10% Yield On KBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
64.00 |
0.50 |
29 |
1.7 |
1.33 (2.1%) |
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