VDE Dividend Type Payments

VANGUARD ENERGY ETF dividend

Although VDE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on VANGUARD ENERGY ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 1:30 PM ET):

VANGUARD ENERGY ETF (VDE)
Bid Ask Last Change Volume P/E Market Cap
99.69 99.72 99.66 -0.22 157K - 51B

VDE Dividend-Like Income Using Covered Calls

With VDE at 99.66, 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% 2.99 0.8
5% 4.98 1.4
10% 9.97 2.7

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 VDE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 104.00 0.50 29 1.7 4.28 (4.3%)
Dec 21 108.00 0.60 64 0.9 8.28 (8.3%)
5% Yield On VDE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 104.00 0.50 29 1.7 4.28 (4.3%)
Dec 21 103.00 1.45 64 2.3 3.28 (3.3%)
10% Yield On VDE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 102.00 1.20 29 4.1 2.28 (2.3%)
Dec 21 101.00 2.05 64 3.2 1.28 (1.3%)

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Want more examples? VDC Dividend | VEA Dividend