FXH Dividend Type Payments

Although FXH has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust Health Care AlphaDEX 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):

First Trust Health Care AlphaDEX (FXH)
Bid Ask Last Change Volume P/E Market Cap
76.53 77.36 76.90 -0.80 46K - 0.0B

FXH Dividend-Like Income Using Covered Calls

With FXH at 76.90, here's a table showing how big the annual "dividend" (ie. 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% 2.31 0.6
5% 3.85 1.1
10% 7.69 2.1

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 FXH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 79.00 0.35 29 1.2 1.64 (2.1%)
Sep 20 80.00 0.65 64 1.0 2.64 (3.4%)
5% Yield On FXH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 79.00 0.35 29 1.2 1.64 (2.1%)
Sep 20 79.00 1.00 64 1.6 1.64 (2.1%)
10% Yield On FXH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 78.00 0.70 29 2.4 0.64 (0.8%)
Sep 20 78.00 1.45 64 2.3 0.64 (0.8%)

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Top 10 Open Interest For Aug 16 Expiration     Top 5 High Yield
1.SPY dividend 6.QQQ dividend   1.SNAP dividend
2.FXI dividend 7.NIO dividend   2.HAL dividend
3.EEM dividend 8.BAC dividend   3.ITCI dividend
4.SPX dividend 9.GLD dividend   4.TWTR dividend
5.GDX dividend 10.EWZ dividend   5.CRWD dividend

Want more examples? FXG Dividend | FXI Dividend