XHS Dividend Type Payments

State Street 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 State Street 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):

State Street SPDR S&P Health Care Services ETF (XHS)
Bid Ask Last Change Volume P/E Market Cap
107.61 107.88 107.65 +0.79 5K - 0.2B

XHS Dividend-Like Income Using Covered Calls

With XHS at 107.65, 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% 3.23 0.9
5% 5.38 1.5
10% 10.77 2.9

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
Jun 18 108.00 2.40 137 1.8 0.12 (0.1%)
Sep 18 108.00 4.00 229 1.7 0.12 (0.1%)
5% Yield On XHS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 18 108.00 2.40 137 1.8 0.12 (0.1%)
Sep 18 108.00 4.00 229 1.7 0.12 (0.1%)

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