XOP Dividend Type Payments
Although XOP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street SPDR S&P Oil & Gas Exploration & Production ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| State Street SPDR S&P Oil & Gas Exploration & Production ETF (XOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 128.85 |
129.20 |
128.96 |
+2.70 |
2.1M |
- |
0.4B |
XOP Dividend-Like Income Using Covered Calls
With XOP at 128.96, 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% |
3.87 |
1.1 |
| 5% |
6.45 |
1.8 |
| 10% |
12.90 |
3.5 |
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 XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
129.00 |
2.01 |
36 |
5.0 |
0.00 (0.0%) |
| Jan 9 |
130.00 |
1.07 |
8 |
13.4 |
0.80 (0.6%) |
| 5% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
129.00 |
2.01 |
36 |
5.0 |
0.00 (0.0%) |
| Jan 9 |
130.00 |
1.07 |
8 |
13.4 |
0.80 (0.6%) |
| 10% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
129.00 |
2.01 |
36 |
5.0 |
0.00 (0.0%) |
| Jan 9 |
130.00 |
1.07 |
8 |
13.4 |
0.80 (0.6%) |
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