XAR Dividend Type Payments

SPDR S&P Aerospace & Defense ETF dividend

Although XAR has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Aerospace & Defense 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):

SPDR S&P Aerospace & Defense ETF (XAR)
Bid Ask Last Change Volume P/E Market Cap
219.25 222.31 221.32 +0.54 112K - 0.2B

XAR Dividend-Like Income Using Covered Calls

With XAR at 221.32, 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% 6.64 1.8
5% 11.07 3.0
10% 22.13 6.1

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 XAR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 225.00 2.20 36 6.1 2.69 (1.2%)
Dec 19 225.00 2.15 99 2.2 2.69 (1.2%)
5% Yield On XAR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 225.00 2.20 36 6.1 2.69 (1.2%)
Jan 16 225.00 4.20 127 3.3 2.69 (1.2%)
10% Yield On XAR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 225.00 2.20 36 6.1 2.69 (1.2%)

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