ITB Dividend Type Payments

iShares US Home Construction ETF dividend

Although ITB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares US Home Construction ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

iShares US Home Construction ETF (ITB)
Bid Ask Last Change Volume P/E Market Cap
30.65 31.00 30.78 -0.63 2.0M - 0.0B

ITB Dividend-Like Income Using Covered Calls

With ITB at 30.78, 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% 0.92 0.3
5% 1.54 0.4
10% 3.08 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:

3% Yield On ITB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 32.50 0.05 5 1.0 1.50 (4.9%)
Dec 21 34.00 0.05 12 0.4 3.00 (9.7%)
5% Yield On ITB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 32.50 0.05 5 1.0 1.50 (4.9%)
Dec 21 33.00 0.10 12 0.8 2.00 (6.5%)
10% Yield On ITB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 32.50 0.05 5 1.0 1.50 (4.9%)
Dec 21 32.50 0.15 12 1.3 1.50 (4.9%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.DXPE dividend 6.NXTM dividend   1. dividend
2.NVT dividend 7.MTOR dividend   2. dividend
3.MSEX dividend 8.WLTW dividend   3. dividend
4.WGP dividend 9.EDZ dividend   4. dividend
5.ECH dividend 10.ODFL dividend   5. dividend

Want more examples? ITA Dividend | ITCI Dividend