SPHQ Dividend Type Payments
Although SPHQ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco S&P 500 Quality ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 12:40 PM ET):
| Invesco S&P 500 Quality ETF (SPHQ) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 61.58 |
61.59 |
61.58 |
-1.42 |
489K |
- |
2.8B |
SPHQ Dividend-Like Income Using Covered Calls
With SPHQ at 61.58, 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% |
1.85 |
0.5 |
| 5% |
3.08 |
0.8 |
| 10% |
6.16 |
1.7 |
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 SPHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
62.00 |
1.25 |
26 |
4.8 |
0.41 (0.7%) |
| Oct 17 |
62.00 |
3.30 |
180 |
1.8 |
0.41 (0.7%) |
| 5% Yield On SPHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
62.00 |
1.25 |
26 |
4.8 |
0.41 (0.7%) |
| Oct 17 |
62.00 |
3.30 |
180 |
1.8 |
0.41 (0.7%) |
| 10% Yield On SPHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
62.00 |
1.25 |
26 |
4.8 |
0.41 (0.7%) |
| Oct 17 |
62.00 |
3.30 |
180 |
1.8 |
0.41 (0.7%) |
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