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
76.18 85.38 79.94 -1.92 7K - 0.1B

XHE Dividend-Like Income Using Covered Calls

With XHE at 79.94, 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% 2.40 0.7
5% 4.00 1.1
10% 7.99 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
Nov 21 85.00 1.45 138 0.8 0.00 (0.0%)
Feb 20 85.00 2.90 229 1.1 0.00 (0.0%)
5% Yield On XHE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 85.00 2.90 229 1.1 0.00 (0.0%)

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