EFA Dividend Type Payments

iShares MSCI EAFE INDEX dividend

Although EFA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares MSCI EAFE INDEX 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):

iShares MSCI EAFE INDEX (EFA)
Bid Ask Last Change Volume P/E Market Cap
62.75 63.22 62.96 +0.07 29.5M - 725B

EFA Dividend-Like Income Using Covered Calls

With EFA at 62.96, here's a table showing how big the annual "dividend" (ie. 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% 1.89 0.5
5% 3.15 0.9
10% 6.30 1.7

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 EFA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 64.00 0.05 8 0.6 0.78 (1.2%)
Nov 30 64.50 0.15 15 1.0 1.28 (2.0%)
5% Yield On EFA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 63.50 0.22 8 2.8 0.28 (0.4%)
Nov 30 64.50 0.15 15 1.0 1.28 (2.0%)
10% Yield On EFA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 63.50 0.22 8 2.8 0.28 (0.4%)
Nov 30 64.00 0.29 15 1.9 0.78 (1.2%)

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Want more examples? EEX Dividend | EFAV Dividend