IWR Dividend Type Payments

iShares RUSSELL MID-CAP INDEX dividend

Although IWR has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares RUSSELL MID-CAP INDEX 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 RUSSELL MID-CAP INDEX (IWR)
Bid Ask Last Change Volume P/E Market Cap
215.73 218.45 217.94 +1.69 134K - 175B

IWR Dividend-Like Income Using Covered Calls

With IWR at 217.94, 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% 6.54 1.8
5% 10.90 3.0
10% 21.79 6.0

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 IWR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 220.00 1.40 37 3.8 1.55 (0.7%)
Nov 16 220.00 3.20 93 3.4 1.55 (0.7%)
5% Yield On IWR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 220.00 1.40 37 3.8 1.55 (0.7%)
Nov 16 220.00 3.20 93 3.4 1.55 (0.7%)

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