VGK Dividend Type Payments

VANGUARD FTSE EUROPE ETF dividend

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

VANGUARD FTSE EUROPE ETF (VGK)
Bid Ask Last Change Volume P/E Market Cap
54.70 55.28 55.02 +0.42 2.5M - 232B

VGK Dividend-Like Income Using Covered Calls

With VGK at 55.02, 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% 1.65 0.5
5% 2.75 0.8
10% 5.50 1.5

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 VGK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 57.00 0.20 37 0.5 1.72 (3.1%)
Dec 21 57.00 0.90 128 0.7 1.72 (3.1%)
5% Yield On VGK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 56.00 0.45 37 1.2 0.72 (1.3%)
Dec 21 56.00 1.35 128 1.1 0.72 (1.3%)

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Top 10 Open Interest For Sep 21 Expiration     Top 5 High Yield
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2.SPY dividend 7.GLD dividend   2.NVDA dividend
3.SPX dividend 8.IWM dividend   3.UVXY dividend
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5.XLF dividend 10.GDX dividend   5.AKRX dividend

Want more examples? VGH Dividend | VGR Dividend