IWS Dividend Type Payments

iShares Russell Mid-cap Value ETF dividend

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

iShares Russell Mid-cap Value ETF (IWS)
Bid Ask Last Change Volume P/E Market Cap
114.36 128.18 122.75 -0.14 511K - 15B

IWS Dividend-Like Income Using Covered Calls

With IWS at 122.75, 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% 3.68 1.0
5% 6.14 1.7
10% 12.28 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 IWS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 128.00 1.55 108 1.3 0.00 (0.0%)
Jun 20 128.00 1.40 52 2.3 0.00 (0.0%)
5% Yield On IWS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 20 128.00 1.40 52 2.3 0.00 (0.0%)
Nov 21 128.00 4.00 206 1.9 0.00 (0.0%)

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