VFH Dividend Type Payments

VANGUARD FINANCIALS ETF dividend

Although VFH has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on VANGUARD FINANCIALS 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 FINANCIALS ETF (VFH)
Bid Ask Last Change Volume P/E Market Cap
70.43 71.02 70.67 +0.64 231K - 87B

VFH Dividend-Like Income Using Covered Calls

With VFH at 70.67, 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% 2.12 0.6
5% 3.53 1.0
10% 7.07 1.9

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 VFH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 72.00 0.35 39 0.9 0.98 (1.4%)
Nov 16 74.00 0.60 95 0.6 2.98 (4.2%)
5% Yield On VFH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 71.00 0.75 39 1.9 0.00 (0.0%)
Nov 16 72.00 1.15 95 1.2 0.98 (1.4%)

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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? VFC Dividend | VFY Dividend