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 |
| 138.82 |
139.50 |
139.11 |
-0.75 |
6.6M |
- |
21B |
XLI Dividend-Like Income Using Covered Calls
With XLI at 139.11, 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% |
4.17 |
1.1 |
| 5% |
6.96 |
1.9 |
| 10% |
13.91 |
3.8 |
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 |
| Dec 6 |
139.50 |
0.38 |
22 |
1.7 |
0.00 (0.0%) |
| Dec 13 |
139.00 |
1.00 |
29 |
1.7 |
0.00 (0.0%) |
| 5% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 13 |
139.50 |
0.79 |
29 |
2.7 |
0.00 (0.0%) |
| Dec 20 |
139.00 |
1.70 |
36 |
3.3 |
0.00 (0.0%) |
| 10% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 13 |
141.00 |
1.48 |
29 |
5.1 |
1.50 (1.1%) |
| Dec 20 |
140.00 |
2.09 |
36 |
5.8 |
0.50 (0.4%) |
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