VAW Dividend Type Payments

Vanguard Materials ETF dividend

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

Vanguard Materials ETF (VAW)
Bid Ask Last Change Volume P/E Market Cap
113.87 115.06 114.29 -0.06 223K - 0.0B

VAW Dividend-Like Income Using Covered Calls

With VAW at 114.29, 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% 3.43 0.9
5% 5.71 1.6
10% 11.43 3.1

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 VAW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 122.00 0.40 40 1.0 6.94 (6.1%)
Feb 15 124.00 0.65 68 1.0 8.94 (7.8%)
5% Yield On VAW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 117.00 1.45 40 3.6 1.94 (1.7%)
Feb 15 119.00 1.55 68 2.3 3.94 (3.4%)
10% Yield On VAW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 117.00 1.45 40 3.6 1.94 (1.7%)
Feb 15 117.00 2.45 68 3.6 1.94 (1.7%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
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2.NVT dividend 7.MTOR dividend   2. dividend
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5.ECH dividend 10.ODFL dividend   5. dividend

Want more examples? VAR Dividend | VB Dividend