XMHQ Dividend Type Payments
Although XMHQ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco S&P MidCap Quality ETF 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):
| Invesco S&P MidCap Quality ETF (XMHQ) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 92.45 |
99.40 |
98.44 |
+0.85 |
156K |
- |
0.1B |
XMHQ Dividend-Like Income Using Covered Calls
With XMHQ at 98.44, 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% |
2.95 |
0.8 |
| 5% |
4.92 |
1.3 |
| 10% |
9.84 |
2.7 |
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 XMHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
100.00 |
1.35 |
50 |
2.7 |
0.60 (0.6%) |
| Jul 18 |
99.00 |
0.65 |
22 |
1.1 |
0.00 (0.0%) |
| 5% Yield On XMHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
100.00 |
1.35 |
50 |
2.7 |
0.60 (0.6%) |
| Sep 19 |
100.00 |
2.50 |
85 |
2.9 |
0.60 (0.6%) |
| 10% Yield On XMHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
100.00 |
1.35 |
50 |
2.7 |
0.60 (0.6%) |
| Sep 19 |
100.00 |
2.50 |
85 |
2.9 |
0.60 (0.6%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
