XLE Dividend Type Payments

Although XLE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Energy to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 11:25 AM ET):

SPDR Select Sector Fund - Energy (XLE)
Bid Ask Last Change Volume P/E Market Cap
62.04 62.05 62.06 -0.02 3.4M - 0.0B

XLE Dividend-Like Income Using Covered Calls

With XLE at 62.06, 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% 1.86 0.5
5% 3.10 0.9
10% 6.21 1.7

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 XLE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 64.00 0.02 3 0.7 1.95 (3.1%)
Jan 25 65.00 0.06 10 0.6 2.95 (4.8%)
5% Yield On XLE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 63.50 0.05 3 1.7 1.45 (2.3%)
Jan 25 64.50 0.10 10 1.0 2.45 (3.9%)
10% Yield On XLE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 63.00 0.13 3 4.3 0.95 (1.5%)
Jan 25 64.00 0.18 10 1.8 1.95 (3.1%)

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Top 10 Open Interest For Jan 18 Expiration     Top 5 High Yield
1.SPY dividend 6.QQQ dividend   1. dividend
2.GE dividend 7.USO dividend   2. dividend
3.BAC dividend 8.XLF dividend   3. dividend
4.EEM dividend 9.AAPL dividend   4. dividend
5.SPX dividend 10.F dividend   5. dividend

Want more examples? XLB Dividend | XLF Dividend