XLI Dividend Type Payments
Although XLI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Industrial 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 Select Sector Fund - Industrial (XLI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 129.93 |
130.36 |
130.12 |
-2.03 |
12.5M |
- |
20B |
XLI Dividend-Like Income Using Covered Calls
With XLI at 130.12, 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% |
3.90 |
1.1 |
| 5% |
6.51 |
1.8 |
| 10% |
13.01 |
3.6 |
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 XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 4 |
131.00 |
0.30 |
25 |
1.2 |
0.64 (0.5%) |
| Apr 11 |
130.00 |
1.80 |
32 |
4.5 |
0.00 (0.0%) |
| 5% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 11 |
130.00 |
1.80 |
32 |
4.5 |
0.00 (0.0%) |
| Mar 14 |
132.00 |
0.72 |
4 |
18.0 |
1.64 (1.3%) |
| 10% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 11 |
130.00 |
1.80 |
32 |
4.5 |
0.00 (0.0%) |
| Mar 14 |
132.00 |
0.72 |
4 |
18.0 |
1.64 (1.3%) |
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