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 Fri 4:16 PM ET):

iShares Russell Mid-cap Value ETF (IWS)
Bid Ask Last Change Volume P/E Market Cap
142.40 143.55 143.04 +0.02 349K - 18B

IWS Dividend-Like Income Using Covered Calls

With IWS at 143.04, 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% 4.29 1.2
5% 7.15 2.0
10% 14.30 3.9

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
May 15 143.00 4.00 141 2.4 0.00 (0.0%)
Jan 16 144.00 0.35 22 1.6 0.45 (0.3%)
5% Yield On IWS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 15 143.00 4.00 141 2.4 0.00 (0.0%)
Aug 21 143.00 6.00 239 2.3 0.00 (0.0%)

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