XLV Dividend Type Payments
Although XLV has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Health Care to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):
| SPDR Select Sector Fund - Health Care (XLV) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 90.90 |
91.62 |
90.91 |
+0.35 |
15.2M |
- |
0.0B |
XLV Dividend-Like Income Using Covered Calls
With XLV at 90.91, 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% |
2.73 |
0.7 |
| 5% |
4.55 |
1.2 |
| 10% |
9.09 |
2.5 |
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 XLV Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 14 |
94.00 |
0.05 |
5 |
1.0 |
2.38 (2.6%) |
| Dec 21 |
95.00 |
0.11 |
12 |
0.9 |
3.38 (3.7%) |
| 5% Yield On XLV Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 14 |
93.50 |
0.11 |
5 |
2.2 |
1.88 (2.1%) |
| Dec 21 |
94.50 |
0.18 |
12 |
1.5 |
2.88 (3.2%) |
| 10% Yield On XLV Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 14 |
93.00 |
0.20 |
5 |
4.0 |
1.38 (1.5%) |
| Dec 21 |
93.50 |
0.35 |
12 |
2.9 |
1.88 (2.1%) |
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