XLE Dividend Type Payments
Although XLE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Energy Select Sector 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 Select Sector Fund - Energy Select Sector (XLE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 88.21 |
88.40 |
88.30 |
-0.30 |
11.6M |
- |
8.4B |
XLE Dividend-Like Income Using Covered Calls
With XLE at 88.30, 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% |
2.65 |
0.7 |
| 5% |
4.42 |
1.2 |
| 10% |
8.83 |
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 XLE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
88.00 |
1.18 |
19 |
4.1 |
0.00 (0.0%) |
| Oct 10 |
88.00 |
1.47 |
26 |
4.1 |
0.00 (0.0%) |
| 5% Yield On XLE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
88.00 |
1.18 |
19 |
4.1 |
0.00 (0.0%) |
| Oct 10 |
88.00 |
1.47 |
26 |
4.1 |
0.00 (0.0%) |
| 10% Yield On XLE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
88.00 |
1.18 |
19 |
4.1 |
0.00 (0.0%) |
| Oct 10 |
88.00 |
1.47 |
26 |
4.1 |
0.00 (0.0%) |
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