XLG Dividend Type Payments

Invesco S&P 500 Top 50 ETF dividend

Although XLG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco S&P 500 Top 50 ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

Invesco S&P 500 Top 50 ETF (XLG)
Bid Ask Last Change Volume P/E Market Cap
43.18 43.29 43.19 -0.10 2.5M - 1.8B

XLG Dividend-Like Income Using Covered Calls

With XLG at 43.19, 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% 1.30 0.4
5% 2.16 0.6
10% 4.32 1.2

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 XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 44.00 0.50 30 1.7 0.71 (1.6%)
Sep 19 44.00 2.05 156 1.3 0.71 (1.6%)
5% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 44.00 0.50 30 1.7 0.71 (1.6%)
Sep 19 44.00 2.05 156 1.3 0.71 (1.6%)
10% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 44.00 0.50 30 1.7 0.71 (1.6%)
Sep 19 44.00 2.05 156 1.3 0.71 (1.6%)

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