PBE Dividend Type Payments
Although PBE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco Biotechnology & Genome ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):
| Invesco Biotechnology & Genome ETF (PBE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 81.48 |
83.25 |
82.41 |
-1.03 |
4K |
- |
0.4B |
PBE Dividend-Like Income Using Covered Calls
With PBE at 82.41, 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% |
2.47 |
0.7 |
| 5% |
4.12 |
1.1 |
| 10% |
8.24 |
2.3 |
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 PBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
83.00 |
0.45 |
18 |
1.1 |
0.00 (0.0%) |
| Jun 18 |
83.00 |
3.60 |
171 |
2.0 |
0.00 (0.0%) |
| 5% Yield On PBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 18 |
83.00 |
3.60 |
171 |
2.0 |
0.00 (0.0%) |
| Feb 20 |
83.00 |
1.50 |
53 |
2.4 |
0.00 (0.0%) |
| 10% Yield On PBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 20 |
83.00 |
1.50 |
53 |
2.4 |
0.00 (0.0%) |
| Mar 20 |
83.00 |
2.35 |
81 |
2.6 |
0.00 (0.0%) |
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