XOP Dividend Type Payments
Although XOP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street SPDR S&P Oil & Gas Exploration & Production 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):
| State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 127.21 |
127.41 |
127.41 |
-1.05 |
2.9M |
- |
0.4B |
XOP Dividend-Like Income Using Covered Calls
With XOP at 127.41, 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% |
3.82 |
1.0 |
| 5% |
6.37 |
1.7 |
| 10% |
12.74 |
3.5 |
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 XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
127.00 |
3.00 |
29 |
8.9 |
0.00 (0.0%) |
| Feb 13 |
127.00 |
3.35 |
36 |
8.2 |
0.00 (0.0%) |
| 5% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
127.00 |
3.00 |
29 |
8.9 |
0.00 (0.0%) |
| Feb 13 |
127.00 |
3.35 |
36 |
8.2 |
0.00 (0.0%) |
| 10% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
127.00 |
3.00 |
29 |
8.9 |
0.00 (0.0%) |
| Feb 13 |
127.00 |
3.35 |
36 |
8.2 |
0.00 (0.0%) |
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