XLU Dividend Type Payments

Although XLU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Utilities to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 11:10 AM ET):

SPDR Select Sector Fund - Utilities (XLU)
Bid Ask Last Change Volume P/E Market Cap
81.05 81.06 81.06 -0.28 4.4M - 11B

XLU Dividend-Like Income Using Covered Calls

With XLU at 81.06, 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% 2.43 0.7
5% 4.05 1.1
10% 8.11 2.2

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 XLU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 1 81.00 1.70 33 5.0 0.00 (0.0%)
Jul 3 81.00 0.56 4 12.5 0.00 (0.0%)
5% Yield On XLU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 1 81.00 1.70 33 5.0 0.00 (0.0%)
Jul 3 81.00 0.56 4 12.5 0.00 (0.0%)
10% Yield On XLU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 1 81.00 1.70 33 5.0 0.00 (0.0%)
Jul 3 81.00 0.56 4 12.5 0.00 (0.0%)

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Want more examples? XLSR Dividend | XLV Dividend