KBE Dividend Type Payments
Although KBE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Bank ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):
SPDR S&P Bank ETF (KBE) |
Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
45.73 |
46.46 |
45.96 |
+0.32 |
1.1M |
- |
3.6B |
KBE Dividend-Like Income Using Covered Calls
With KBE at 45.96, 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% |
1.38 |
0.4 |
5% |
2.30 |
0.6 |
10% |
4.60 |
1.3 |
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 KBE Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 17 |
47.00 |
0.15 |
24 |
0.6 |
0.54 (1.2%) |
Jun 21 |
47.00 |
1.00 |
59 |
1.7 |
0.54 (1.2%) |
5% Yield On KBE Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Jun 21 |
47.00 |
1.00 |
59 |
1.7 |
0.54 (1.2%) |
Nov 15 |
47.00 |
1.95 |
206 |
0.9 |
0.54 (1.2%) |
10% Yield On KBE Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Jun 21 |
47.00 |
1.00 |
59 |
1.7 |
0.54 (1.2%) |
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