VGT Dividend Type Payments

VANGUARD INFORMATION TECH dividend

Although VGT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on VANGUARD INFORMATION TECH to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 12:00 PM ET):

VANGUARD INFORMATION TECH (VGT)
Bid Ask Last Change Volume P/E Market Cap
188.79 188.86 188.81 +1.55 273K - 222B

VGT Dividend-Like Income Using Covered Calls

With VGT at 188.81, 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% 5.66 1.6
5% 9.44 2.6
10% 18.88 5.2

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 VGT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 199.00 0.50 26 1.9 10.14 (5.4%)
Dec 21 191.00 1.00 61 1.6 2.14 (1.1%)
5% Yield On VGT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 197.00 0.85 26 3.3 8.14 (4.3%)
Feb 15 200.00 3.10 117 2.6 11.14 (5.9%)
10% Yield On VGT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 195.00 1.55 26 6.0 6.14 (3.3%)
Feb 15 193.00 6.30 117 5.4 4.14 (2.2%)

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Want more examples? VGR Dividend | VGZ Dividend