XOP Dividend Type Payments
Although XOP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Oil & Gas Explor & Product to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):
| SPDR S&P Oil & Gas Explor & Product (XOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 133.33 |
133.91 |
133.33 |
-0.09 |
3.5M |
- |
0.4B |
XOP Dividend-Like Income Using Covered Calls
With XOP at 133.33, 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% |
4.00 |
1.1 |
| 5% |
6.67 |
1.8 |
| 10% |
13.33 |
3.7 |
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 XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
134.00 |
2.26 |
17 |
13.3 |
0.09 (0.1%) |
| Oct 10 |
133.50 |
3.20 |
24 |
11.6 |
0.00 (0.0%) |
| 5% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
134.00 |
2.26 |
17 |
13.3 |
0.09 (0.1%) |
| Oct 10 |
133.50 |
3.20 |
24 |
11.6 |
0.00 (0.0%) |
| 10% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
134.00 |
2.26 |
17 |
13.3 |
0.09 (0.1%) |
| Oct 10 |
133.50 |
3.20 |
24 |
11.6 |
0.00 (0.0%) |
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