VOO Dividend Type Payments
Although VOO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on VANGUARD S&P 500 ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):
| VANGUARD S&P 500 ETF (VOO) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 258.06 |
258.19 |
257.67 |
+0.09 |
2.8M |
- |
4,185B |
VOO Dividend-Like Income Using Covered Calls
With VOO at 257.67, 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% |
7.73 |
2.1 |
| 5% |
12.88 |
3.5 |
| 10% |
25.77 |
7.1 |
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 VOO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 19 |
260.00 |
0.30 |
3 |
10.0 |
1.81 (0.7%) |
| Nov 16 |
265.00 |
0.90 |
31 |
2.9 |
6.81 (2.6%) |
| 5% Yield On VOO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 19 |
260.00 |
0.30 |
3 |
10.0 |
1.81 (0.7%) |
| Nov 16 |
260.00 |
3.00 |
31 |
9.7 |
1.81 (0.7%) |
| 10% Yield On VOO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 19 |
260.00 |
0.30 |
3 |
10.0 |
1.81 (0.7%) |
| Nov 16 |
260.00 |
3.00 |
31 |
9.7 |
1.81 (0.7%) |
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