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 Fri 4:16 PM ET):

SPDR Select Sector Fund - Utilities (XLU)
Bid Ask Last Change Volume P/E Market Cap
80.97 81.15 81.19 +0.36 10.5M - 11B

XLU Dividend-Like Income Using Covered Calls

With XLU at 81.19, 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% 2.44 0.7
5% 4.06 1.1
10% 8.12 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
Jul 11 81.00 0.43 36 0.8 0.00 (0.0%)
Jun 13 81.00 0.30 8 1.9 0.00 (0.0%)
5% Yield On XLU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 13 81.00 0.30 8 1.9 0.00 (0.0%)
Jul 18 83.00 0.60 43 1.4 1.85 (2.3%)
10% Yield On XLU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 20 81.00 0.77 15 4.1 0.00 (0.0%)

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Want more examples? XLSR Dividend | XLV Dividend