VBR Dividend Type Payments

VANGUARD SM-CAP VALUE ETF dividend

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

VANGUARD SM-CAP VALUE ETF (VBR)
Bid Ask Last Change Volume P/E Market Cap
139.73 140.75 140.14 +1.30 307K - 311B

VBR Dividend-Like Income Using Covered Calls

With VBR at 140.14, 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% 4.20 1.2
5% 7.01 1.9
10% 14.01 3.8

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 VBR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 143.00 0.05 4 1.3 2.25 (1.6%)
Sep 21 142.00 0.75 39 1.9 1.25 (0.9%)
5% Yield On VBR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 142.00 0.75 39 1.9 1.25 (0.9%)
Dec 21 141.00 2.80 130 2.2 0.25 (0.2%)

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Top 10 Open Interest For Aug 17 Expiration     Top 5 High Yield
1.SPY dividend 6.BAC dividend   1.M dividend
2.EEM dividend 7.AABA dividend   2.UVXY dividend
3.QQQ dividend 8.FXI dividend   3.JWN dividend
4.SPX dividend 9.FB dividend   4.CGC dividend
5.XLF dividend 10.GLD dividend   5.A dividend

Want more examples? VBND Dividend | VC Dividend