XHE Dividend Type Payments

State Street SPDR S&P Health Care Equipment ETF dividend

Although XHE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street SPDR S&P Health Care Equipment ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

State Street SPDR S&P Health Care Equipment ETF (XHE)
Bid Ask Last Change Volume P/E Market Cap
86.28 87.11 86.36 -0.20 7K - 0.1B

XHE Dividend-Like Income Using Covered Calls

With XHE at 86.36, 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% 2.59 0.7
5% 4.32 1.2
10% 8.64 2.4

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 XHE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 15 87.00 1.20 103 1.1 0.00 (0.0%)
Aug 21 87.00 2.90 201 1.4 0.00 (0.0%)
5% Yield On XHE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 21 87.00 2.90 201 1.4 0.00 (0.0%)

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