BAB Dividend Type Payments
Although BAB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco Taxable Municipal Bond ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 11:50 AM ET):
| Invesco Taxable Municipal Bond ETF (BAB) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 27.44 | 27.47 | 27.46 | 0.00 | 24K | - | 0.6B |
BAB Dividend-Like Income Using Covered Calls
With BAB at 27.46, 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% | 0.82 | 0.2 |
| 5% | 1.37 | 0.4 |
| 10% | 2.75 | 0.8 |
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:
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| Top 10 Open Interest For Nov 21 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | KVUE dividend | 6. | GLD dividend | 1. | INBX dividend | |
| 2. | IBIT dividend | 7. | TLT dividend | 2. | BHVN dividend | |
| 3. | NVDA dividend | 8. | EEM dividend | 3. | USAR dividend | |
| 4. | SLV dividend | 9. | INTC dividend | 4. | ARCT dividend | |
| 5. | HYG dividend | 10. | SPY dividend | 5. | CRML dividend | |
Want more examples? BA Dividend | BABA Dividend
