IWD Dividend Type Payments

iShares Russell 1000 Value ETF dividend

Although IWD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares Russell 1000 Value ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

iShares Russell 1000 Value ETF (IWD)
Bid Ask Last Change Volume P/E Market Cap
191.44 204.41 202.87 -1.19 4.2M - 47B

IWD Dividend-Like Income Using Covered Calls

With IWD at 202.87, 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% 6.09 1.7
5% 10.14 2.8
10% 20.29 5.6

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 IWD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 205.00 1.80 46 3.9 0.59 (0.3%)
May 15 205.00 7.50 193 3.9 0.59 (0.3%)
5% Yield On IWD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 205.00 1.80 46 3.9 0.59 (0.3%)
May 15 205.00 7.50 193 3.9 0.59 (0.3%)

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