XMHQ Dividend Type Payments
Although XMHQ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco S&P MidCap 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 4:16 PM ET):
| Invesco S&P MidCap Quality ETF (XMHQ) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 90.01 |
94.00 |
91.79 |
+0.16 |
222K |
- |
0.1B |
XMHQ Dividend-Like Income Using Covered Calls
With XMHQ at 91.79, 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% |
2.75 |
0.8 |
| 5% |
4.59 |
1.3 |
| 10% |
9.18 |
2.5 |
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 XMHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
94.00 |
0.40 |
19 |
2.1 |
0.00 (0.0%) |
| Sep 19 |
100.00 |
1.65 |
145 |
1.1 |
6.00 (6.5%) |
| 5% Yield On XMHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
94.00 |
0.40 |
19 |
2.1 |
0.00 (0.0%) |
| Sep 19 |
94.00 |
4.20 |
145 |
2.9 |
0.00 (0.0%) |
| 10% Yield On XMHQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
94.00 |
4.20 |
145 |
2.9 |
0.00 (0.0%) |
| Jun 20 |
94.00 |
1.95 |
54 |
3.6 |
0.00 (0.0%) |
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