XLE Dividend Type Payments

Although XLE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ENERGY SELECT SECTOR SPDR to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

ENERGY SELECT SECTOR SPDR (XLE)
Bid Ask Last Change Volume P/E Market Cap
66.46 66.55 66.39 +0.96 14.8M - 194B

XLE Dividend-Like Income Using Covered Calls

With XLE at 66.39, 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% 1.99 0.5
5% 3.32 0.9
10% 6.64 1.8

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
Nov 23 70.00 0.07 9 0.8 3.45 (5.2%)
Nov 30 71.00 0.12 16 0.8 4.45 (6.7%)
5% Yield On XLE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 69.50 0.10 9 1.1 2.95 (4.4%)
Nov 30 70.50 0.18 16 1.1 3.95 (5.9%)
10% Yield On XLE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 69.00 0.17 9 1.9 2.45 (3.7%)
Nov 30 69.50 0.32 16 2.0 2.95 (4.4%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.SPY dividend 6.FXI dividend   1.WSM dividend
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3.EEM dividend 8.PBR dividend   3.AMAT dividend
4.EWZ dividend 9.F dividend   4.AMRN dividend
5.QQQ dividend 10.BAC dividend   5.AMD dividend

Want more examples? XLB Dividend | XLF Dividend