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 Fri 4:16 PM ET):

iShares S&P 500 Growth ETF (IVW)
Bid Ask Last Change Volume P/E Market Cap
124.73 125.25 124.99 -0.01 1.1M - 47B

IVW Dividend-Like Income Using Covered Calls

With IVW at 124.99, 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% 3.75 1.0
5% 6.25 1.7
10% 12.50 3.4

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
Jan 16 125.00 1.55 22 5.9 0.00 (0.0%)
Apr 17 125.00 4.20 113 3.5 0.00 (0.0%)
5% Yield On IVW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 125.00 1.55 22 5.9 0.00 (0.0%)
Apr 17 125.00 4.20 113 3.5 0.00 (0.0%)
10% Yield On IVW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 125.00 1.55 22 5.9 0.00 (0.0%)
Apr 17 125.00 4.20 113 3.5 0.00 (0.0%)

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