Higher Energy Prices Boost Profitability, XLEI Offers Attractive Yields

Oil prices may have dropped from their recent high of almost $105 per barrel, but the energy sector remains highly profitable even at around $90 per barrel.

Tim Plaehn, editor of The Dividend Hunter, suggests that investors looking for a higher-yielding way to play higher energy prices should consider the State Street Energy Select Sector SPDR Premium Income ETF (XLEI).

XLEI is a covered call fund that owns shares of the State Street Energy Select Sector SPDR ETF (XLE) and sells call options on those shares to generate cash flow, which is then used to pay dividends.

The fund has a recent indicative yield of 15.7% and has delivered impressive returns, with a year-to-date total return of 30.5% and a one-year return of 36.9%.