XHS Dividend Type Payments

SPDR S&P Health Care Services ETF dividend

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

SPDR S&P Health Care Services ETF (XHS)
Bid Ask Last Change Volume P/E Market Cap
97.25 98.76 97.95 -0.89 5K - 0.2B

XHS Dividend-Like Income Using Covered Calls

With XHS at 97.95, 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% 2.94 0.8
5% 4.90 1.3
10% 9.80 2.7

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 XHS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 100.00 0.65 33 2.0 1.24 (1.3%)
Dec 19 99.00 1.20 96 1.3 0.24 (0.2%)
5% Yield On XHS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 100.00 0.65 33 2.0 1.24 (1.3%)
Mar 20 99.00 2.70 187 1.4 0.24 (0.2%)
10% Yield On XHS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 99.00 0.90 33 2.7 0.24 (0.2%)

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