XHS Dividend Type Payments

SPDR S&P Health Care Services ETF dividend

Although XHS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Health Care Services ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 2:45 PM ET):

SPDR S&P Health Care Services ETF (XHS)
Bid Ask Last Change Volume P/E Market Cap
96.83 96.98 96.01 +0.46 6K - 0.2B

XHS Dividend-Like Income Using Covered Calls

With XHS at 96.01, 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% 2.88 0.8
5% 4.80 1.3
10% 9.60 2.6

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 XHS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 100.00 1.40 144 1.0 3.02 (3.1%)
Dec 19 100.00 2.60 235 1.1 3.02 (3.1%)
5% Yield On XHS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 97.00 2.95 144 2.0 0.02 (0.0%)
Dec 19 97.00 4.20 235 1.8 0.02 (0.0%)

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