XLI Dividend Type Payments
Although XLI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Industrial to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| SPDR Select Sector Fund - Industrial (XLI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 150.15 |
150.67 |
150.44 |
-0.69 |
8.8M |
- |
23B |
XLI Dividend-Like Income Using Covered Calls
With XLI at 150.44, 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% |
4.51 |
1.2 |
| 5% |
7.52 |
2.1 |
| 10% |
15.04 |
4.1 |
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 XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
151.00 |
0.28 |
22 |
1.3 |
0.33 (0.2%) |
| Sep 12 |
151.00 |
0.40 |
29 |
1.4 |
0.33 (0.2%) |
| 5% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
152.50 |
0.73 |
22 |
3.3 |
1.83 (1.2%) |
| Sep 12 |
152.00 |
0.76 |
29 |
2.6 |
1.33 (0.9%) |
| 10% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 17 |
150.00 |
4.25 |
64 |
5.6 |
0.00 (0.0%) |
| Sep 19 |
150.00 |
2.69 |
36 |
5.6 |
0.00 (0.0%) |
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