LQD Dividend Type Payments
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 Fri 4:16 PM ET):
| iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 110.55 | 110.71 | 110.57 | -0.11 | 37.4M | - | 32B |
LQD Dividend-Like Income Using Covered Calls
With LQD at 110.57, 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% | 3.32 | 0.9 |
| 5% | 5.53 | 1.5 |
| 10% | 11.06 | 3.0 |
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 LQD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Mar 6 | 110.50 | 0.56 | 36 | 1.0 | 0.00 (0.0%) | |
| Mar 20 | 111.00 | 0.60 | 50 | 1.2 | 0.29 (0.3%) | |
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| Top 10 Open Interest For Feb 20 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | QQQ dividend | 1. | BE dividend | |
| 2. | SLV dividend | 7. | EWZ dividend | 2. | OCUL dividend | |
| 3. | KWEB dividend | 8. | CORZ dividend | 3. | SMCI dividend | |
| 4. | GLD dividend | 9. | INTC dividend | 4. | WDC dividend | |
| 5. | IBIT dividend | 10. | SPY dividend | 5. | IREN dividend | |
Want more examples? LPX Dividend | LQDA Dividend
