VB Dividend Type Payments

Vanguard Small-Cap ETF dividend

Although VB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard Small-Cap 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):

Vanguard Small-Cap ETF (VB)
Bid Ask Last Change Volume P/E Market Cap
220.48 229.00 223.40 -0.23 701K - 17B

VB Dividend-Like Income Using Covered Calls

With VB at 223.40, 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% 6.70 1.8
5% 11.17 3.1
10% 22.34 6.1

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 VB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 230.00 8.50 134 6.3 1.00 (0.4%)
Dec 19 230.00 12.40 225 5.5 1.00 (0.4%)
5% Yield On VB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 230.00 8.50 134 6.3 1.00 (0.4%)
Dec 19 230.00 12.40 225 5.5 1.00 (0.4%)
10% Yield On VB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 230.00 8.50 134 6.3 1.00 (0.4%)
Jun 20 230.00 3.00 43 7.0 1.00 (0.4%)

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Want more examples? VAW Dividend | VBK Dividend