VBK Dividend Type Payments

Vanguard Sm-Cap Growth ET dividend

Although VBK has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard Sm-Cap Growth ET 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 Sm-Cap Growth ET (VBK)
Bid Ask Last Change Volume P/E Market Cap
153.88 158.25 157.14 -2.60 415K - 0.0B

VBK Dividend-Like Income Using Covered Calls

With VBK at 157.14, 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% 4.71 1.3
5% 7.86 2.2
10% 15.71 4.3

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 VBK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 160.00 0.30 8 3.8 1.75 (1.1%)
Jan 18 165.00 0.55 36 1.5 6.75 (4.3%)
5% Yield On VBK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 160.00 0.30 8 3.8 1.75 (1.1%)
Jan 18 164.00 0.90 36 2.5 5.75 (3.7%)
10% Yield On VBK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 159.00 0.60 8 7.5 0.75 (0.5%)
Jan 18 161.00 1.85 36 5.1 2.75 (1.8%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
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