XLY Dividend Type Payments

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

SPDR CONSUMER DISCRET SELECT (XLY)
Bid Ask Last Change Volume P/E Market Cap
111.52 112.33 111.86 -1.38 6.3M - 138B

XLY Dividend-Like Income Using Covered Calls

With XLY at 111.86, 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% 3.36 0.9
5% 5.59 1.5
10% 11.19 3.1

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 XLY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 113.50 0.04 3 1.3 1.17 (1.0%)
Aug 24 114.50 0.14 10 1.4 2.17 (1.9%)
5% Yield On XLY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 113.00 0.11 3 3.7 0.67 (0.6%)
Aug 24 114.00 0.22 10 2.2 1.67 (1.5%)
10% Yield On XLY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 113.00 0.11 3 3.7 0.67 (0.6%)
Aug 24 113.50 0.33 10 3.3 1.17 (1.0%)

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Top 10 Open Interest For Aug 17 Expiration     Top 5 High Yield
1.SPY dividend 6.XLF dividend   1.NVDA dividend
2.EEM dividend 7.FB dividend   2.UVXY dividend
3.QQQ dividend 8.FXI dividend   3.JWN dividend
4.SPX dividend 9.GLD dividend   4.GDS dividend
5.BAC dividend 10.AABA dividend   5.AMAT dividend

Want more examples? XLV Dividend | XME Dividend