KIE Dividend Type Payments
Although KIE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Insurance ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):
| SPDR S&P Insurance ETF (KIE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 56.60 |
57.58 |
56.97 |
+0.51 |
595K |
- |
0.7B |
KIE Dividend-Like Income Using Covered Calls
With KIE at 56.97, 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% |
1.71 |
0.5 |
| 5% |
2.85 |
0.8 |
| 10% |
5.70 |
1.6 |
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 KIE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
58.00 |
0.55 |
25 |
2.2 |
0.42 (0.7%) |
| Jun 20 |
58.00 |
1.85 |
179 |
1.0 |
0.42 (0.7%) |
| 5% Yield On KIE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
58.00 |
0.55 |
25 |
2.2 |
0.42 (0.7%) |
| Jun 20 |
58.00 |
1.85 |
179 |
1.0 |
0.42 (0.7%) |
| 10% Yield On KIE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
58.00 |
0.55 |
25 |
2.2 |
0.42 (0.7%) |
| Feb 21 |
58.00 |
1.25 |
60 |
2.1 |
0.42 (0.7%) |
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