IVOO Dividend Type Payments

Vanguard S&P Mid-Cap 400 ETF dividend

Although IVOO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard S&P Mid-Cap 400 ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

Vanguard S&P Mid-Cap 400 ETF (IVOO)
Bid Ask Last Change Volume P/E Market Cap
107.66 107.86 107.72 +0.43 68K - 0.0B

IVOO Dividend-Like Income Using Covered Calls

With IVOO at 107.72, 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% 3.23 0.9
5% 5.39 1.5
10% 10.77 3.0

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 IVOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 108.00 1.30 38 3.4 0.14 (0.1%)
Oct 17 108.00 2.95 101 2.9 0.14 (0.1%)
5% Yield On IVOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 108.00 1.30 38 3.4 0.14 (0.1%)
Oct 17 108.00 2.95 101 2.9 0.14 (0.1%)
10% Yield On IVOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 108.00 1.30 38 3.4 0.14 (0.1%)

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