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 Mon 11:25 AM ET):

Vanguard S&P 500 ETF (VOO)
Bid Ask Last Change Volume P/E Market Cap
271.56 271.58 271.56 +0.15 1.2M - 0.0B

VOO Dividend-Like Income Using Covered Calls

With VOO at 271.56, 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% 8.15 2.2
5% 13.58 3.7
10% 27.16 7.4

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
Jul 19 275.00 1.20 26 4.6 3.42 (1.3%)
Oct 18 280.00 3.80 117 3.2 8.42 (3.1%)
5% Yield On VOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 275.00 1.20 26 4.6 3.42 (1.3%)
Oct 18 275.00 6.00 117 5.1 3.42 (1.3%)

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Want more examples? VOE Dividend | VOOG Dividend