VCIT Dividend Type Payments
Although VCIT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard Intermediate-Term 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):
Vanguard Intermediate-Term Corporate Bond ETF (VCIT) | ||||||
---|---|---|---|---|---|---|
Bid | Ask | Last | Change | Volume | P/E | Market Cap |
78.37 | 78.44 | 78.41 | +0.19 | 4.6M | - | 3.1B |
VCIT Dividend-Like Income Using Covered Calls
With VCIT at 78.41, 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% | 2.35 | 0.6 |
5% | 3.92 | 1.1 |
10% | 7.84 | 2.1 |
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 VCIT Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
Jun 21 | 79.00 | 0.40 | 57 | 0.7 | 0.56 (0.7%) | |
Aug 16 | 79.00 | 0.80 | 113 | 0.7 | 0.56 (0.7%) |
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Top 10 Open Interest For May 17 Expiration | Top 5 High Yield | |||||
---|---|---|---|---|---|---|
1. | IWM dividend | 6. | EEM dividend | 1. | WOLF dividend | |
2. | HYG dividend | 7. | KWEB dividend | 2. | ENVX dividend | |
3. | QQQ dividend | 8. | SLV dividend | 3. | FSLY dividend | |
4. | SPY dividend | 9. | TSLA dividend | 4. | NOVA dividend | |
5. | FXI dividend | 10. | NVDA dividend | 5. | COIN dividend |
Want more examples? VCEL Dividend | VCLT Dividend