LQD Dividend Type Payments

iShares iBoxx $ Investment Grade Corporate Bond ETF dividend

Although LQD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares iBoxx $ Investment Grade Corporate Bond ETF 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 iBoxx $ Investment Grade Corporate Bond ETF (LQD)
Bid Ask Last Change Volume P/E Market Cap
104.33 105.75 104.73 -0.31 30.0M - 31B

LQD Dividend-Like Income Using Covered Calls

With LQD at 104.73, 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% 3.14 0.9
5% 5.24 1.4
10% 10.47 2.9

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 LQD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 3 106.00 0.10 9 1.1 0.25 (0.2%)
May 10 106.00 0.19 16 1.2 0.25 (0.2%)
5% Yield On LQD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 106.00 0.33 23 1.4 0.25 (0.2%)
May 24 106.00 0.46 30 1.5 0.25 (0.2%)

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Top 10 Open Interest For May 17 Expiration     Top 5 High Yield
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5.FXI dividend 10.NVDA dividend   5.PENN dividend

Want more examples? LPX Dividend | LQDA Dividend