XHE Dividend Type Payments

SPDR S&P Health Care Equipment dividend

Although XHE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Health Care Equipment 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):

SPDR S&P Health Care Equipment (XHE)
Bid Ask Last Change Volume P/E Market Cap
79.52 80.79 80.23 -0.39 10K - 0.1B

XHE Dividend-Like Income Using Covered Calls

With XHE at 80.23, 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% 2.41 0.7
5% 4.01 1.1
10% 8.02 2.2

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
Oct 17 81.00 0.70 33 2.1 0.21 (0.3%)
Nov 21 81.00 1.50 68 2.2 0.21 (0.3%)
5% Yield On XHE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 81.00 0.70 33 2.1 0.21 (0.3%)
Nov 21 81.00 1.50 68 2.2 0.21 (0.3%)
10% Yield On XHE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 21 81.00 1.50 68 2.2 0.21 (0.3%)

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