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 Fri 4:16 PM ET):
| Vanguard S&P 500 ETF (VOO) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 255.04 |
255.14 |
254.98 |
+2.78 |
2.8M |
- |
0.0B |
VOO Dividend-Like Income Using Covered Calls
With VOO at 254.98, 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% |
7.65 |
2.1 |
| 5% |
12.75 |
3.5 |
| 10% |
25.50 |
7.0 |
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 |
| Mar 15 |
260.00 |
1.05 |
29 |
3.6 |
4.86 (1.9%) |
| Apr 18 |
260.00 |
2.45 |
63 |
3.9 |
4.86 (1.9%) |
| 5% Yield On VOO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Mar 15 |
260.00 |
1.05 |
29 |
3.6 |
4.86 (1.9%) |
| Apr 18 |
260.00 |
2.45 |
63 |
3.9 |
4.86 (1.9%) |
| 10% Yield On VOO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Mar 15 |
255.00 |
3.10 |
29 |
10.2 |
0.00 (0.0%) |
| Apr 18 |
255.00 |
5.10 |
63 |
7.9 |
0.00 (0.0%) |
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