PPA Dividend Type Payments
Although PPA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco Aerospace & Defense ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 3:50 PM ET):
| Invesco Aerospace & Defense ETF (PPA) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 146.99 |
147.06 |
147.05 |
+1.95 |
166K |
- |
2.1B |
PPA Dividend-Like Income Using Covered Calls
With PPA at 147.05, 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% |
4.41 |
1.2 |
| 5% |
7.35 |
2.0 |
| 10% |
14.71 |
4.0 |
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 PPA Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
147.00 |
1.15 |
12 |
9.1 |
0.00 (0.0%) |
| Sep 19 |
150.00 |
1.35 |
47 |
2.9 |
2.94 (2.0%) |
| 5% Yield On PPA Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
147.00 |
1.15 |
12 |
9.1 |
0.00 (0.0%) |
| Sep 19 |
150.00 |
1.35 |
47 |
2.9 |
2.94 (2.0%) |
| 10% Yield On PPA Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
147.00 |
1.15 |
12 |
9.1 |
0.00 (0.0%) |
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