PXE Dividend Type Payments
Although PXE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco Energy Exploration & Production ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 11:15 AM ET):
| Invesco Energy Exploration & Production ETF (PXE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 31.77 |
31.79 |
31.73 |
+0.14 |
8K |
- |
0.1B |
PXE Dividend-Like Income Using Covered Calls
With PXE at 31.73, 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% |
0.95 |
0.3 |
| 5% |
1.59 |
0.4 |
| 10% |
3.17 |
0.9 |
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 PXE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
32.00 |
0.65 |
31 |
2.1 |
0.21 (0.7%) |
| Feb 21 |
32.00 |
1.40 |
94 |
1.5 |
0.21 (0.7%) |
| 5% Yield On PXE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
32.00 |
0.65 |
31 |
2.1 |
0.21 (0.7%) |
| Feb 21 |
32.00 |
1.40 |
94 |
1.5 |
0.21 (0.7%) |
| 10% Yield On PXE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
32.00 |
0.65 |
31 |
2.1 |
0.21 (0.7%) |
| Feb 21 |
32.00 |
1.40 |
94 |
1.5 |
0.21 (0.7%) |
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