IVW Dividend Type Payments

iShares S&P 500 Growth ETF dividend

Although IVW has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares S&P 500 Growth ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

iShares S&P 500 Growth ETF (IVW)
Bid Ask Last Change Volume P/E Market Cap
82.33 82.85 80.97 -0.44 1.9M - 30B

IVW Dividend-Like Income Using Covered Calls

With IVW at 80.97, 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% 2.43 0.7
5% 4.05 1.1
10% 8.10 2.2

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 IVW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 21 83.00 0.75 58 1.3 0.15 (0.2%)
Jul 19 83.00 1.30 86 1.5 0.15 (0.2%)
5% Yield On IVW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 21 83.00 0.75 58 1.3 0.15 (0.2%)
Jul 19 83.00 1.30 86 1.5 0.15 (0.2%)

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