IWO Dividend Type Payments

iShares RUSSELL 2000 GROWTH INC dividend

Although IWO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares RUSSELL 2000 GROWTH INC to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

iShares RUSSELL 2000 GROWTH INC (IWO)
Bid Ask Last Change Volume P/E Market Cap
199.69 215.98 211.79 +0.52 790K - 109B

IWO Dividend-Like Income Using Covered Calls

With IWO at 211.79, 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% 6.35 1.7
5% 10.59 2.9
10% 21.18 5.8

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 IWO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 215.00 1.85 33 2.6 0.00 (0.0%)
Oct 19 220.00 1.45 61 2.4 4.02 (1.9%)
5% Yield On IWO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 215.00 3.30 61 3.8 0.00 (0.0%)
Nov 16 220.00 2.65 89 3.0 4.02 (1.9%)

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