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 Fri 10:55 AM ET):

Invesco S&P 500 Top 50 ETF (XLG)
Bid Ask Last Change Volume P/E Market Cap
46.35 46.36 46.36 +0.64 377K - 1.9B

XLG Dividend-Like Income Using Covered Calls

With XLG at 46.36, 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% 1.39 0.4
5% 2.32 0.6
10% 4.64 1.3

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
Apr 17 47.00 0.45 35 1.3 0.64 (1.4%)
Sep 19 47.00 2.20 190 1.2 0.64 (1.4%)
5% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 47.00 0.45 35 1.3 0.64 (1.4%)
Sep 19 47.00 2.20 190 1.2 0.64 (1.4%)
10% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 47.00 0.45 35 1.3 0.64 (1.4%)
Mar 21 47.00 0.25 8 3.1 0.64 (1.4%)

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