IWF Dividend Type Payments

iShares RUSSELL 1000 GROWTH INC dividend

Although IWF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares RUSSELL 1000 GROWTH INC to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 10:50 AM ET):

iShares RUSSELL 1000 GROWTH INC (IWF)
Bid Ask Last Change Volume P/E Market Cap
149.93 149.95 149.87 -0.69 309K - 423B

IWF Dividend-Like Income Using Covered Calls

With IWF at 149.87, 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% 4.50 1.2
5% 7.49 2.1
10% 14.99 4.1

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 IWF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 153.00 0.70 36 1.9 3.05 (2.0%)
Nov 16 155.00 1.40 92 1.5 5.05 (3.4%)
5% Yield On IWF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 152.00 1.10 36 3.1 2.05 (1.4%)
Nov 16 153.00 2.15 92 2.3 3.05 (2.0%)
10% Yield On IWF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 151.00 1.55 36 4.3 1.05 (0.7%)
Nov 16 150.00 3.90 92 4.2 0.05 (0.0%)

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