VDC Dividend Type Payments

VANGUARD CONSUMER STAPLES ETF dividend

Although VDC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on VANGUARD CONSUMER STAPLES ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 12:50 PM ET):

VANGUARD CONSUMER STAPLES ETF (VDC)
Bid Ask Last Change Volume P/E Market Cap
139.15 139.19 139.17 +0.82 59K - 44B

VDC Dividend-Like Income Using Covered Calls

With VDC at 139.17, 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% 4.18 1.1
5% 6.96 1.9
10% 13.92 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 VDC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 140.00 0.05 4 1.3 0.81 (0.6%)
Sep 21 141.00 0.55 39 1.4 1.81 (1.3%)
5% Yield On VDC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 140.00 0.85 39 2.2 0.81 (0.6%)
Oct 19 139.00 1.80 67 2.4 0.00 (0.0%)

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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.DBD dividend
3.QQQ dividend 8.FXI dividend   3.UVXY dividend
4.SPX dividend 9.FB dividend   4.CGC dividend
5.XLF dividend 10.GLD dividend   5.JWN dividend

Want more examples? VCYT Dividend | VDE Dividend