XOP Dividend Type Payments
Although XOP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Oil & Gas Explor & Product to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 11:40 AM ET):
| SPDR S&P Oil & Gas Explor & Product (XOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 111.40 |
111.45 |
111.43 |
-2.48 |
1.3M |
- |
0.4B |
XOP Dividend-Like Income Using Covered Calls
With XOP at 111.43, here's a table showing how big the annual "dividend" (i.e. 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% |
3.34 |
0.9 |
| 5% |
5.57 |
1.5 |
| 10% |
11.14 |
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 XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
111.00 |
1.97 |
3 |
50.7 |
0.00 (0.0%) |
| Jun 6 |
111.00 |
5.90 |
38 |
14.3 |
0.00 (0.0%) |
| 5% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
111.00 |
1.97 |
3 |
50.7 |
0.00 (0.0%) |
| Jun 6 |
111.00 |
5.90 |
38 |
14.3 |
0.00 (0.0%) |
| 10% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
111.00 |
1.97 |
3 |
50.7 |
0.00 (0.0%) |
| Jun 6 |
111.00 |
5.90 |
38 |
14.3 |
0.00 (0.0%) |
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