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 Fri 4:16 PM ET):
| SPDR Select Sector Fund - Health Care (XLV) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 92.90 |
93.19 |
92.85 |
+1.38 |
8.1M |
- |
0.0B |
XLV Dividend-Like Income Using Covered Calls
With XLV at 92.85, 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% |
2.79 |
0.8 |
| 5% |
4.64 |
1.3 |
| 10% |
9.29 |
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 |
| Feb 22 |
94.00 |
0.13 |
8 |
1.6 |
0.81 (0.9%) |
| Mar 1 |
95.00 |
0.12 |
15 |
0.8 |
1.81 (1.9%) |
| 5% Yield On XLV Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 22 |
94.00 |
0.13 |
8 |
1.6 |
0.81 (0.9%) |
| Mar 1 |
94.50 |
0.22 |
15 |
1.5 |
1.31 (1.4%) |
| 10% Yield On XLV Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 22 |
93.50 |
0.27 |
8 |
3.4 |
0.31 (0.3%) |
| Mar 1 |
93.50 |
0.52 |
15 |
3.5 |
0.31 (0.3%) |
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