BLV Dividend Type Payments

Vanguard Long-Term Bond ETF dividend

Although BLV has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard Long-Term Bond 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 Long-Term Bond ETF (BLV)
Bid Ask Last Change Volume P/E Market Cap
68.30 70.00 69.95 +0.34 472K - 0.5B

BLV Dividend-Like Income Using Covered Calls

With BLV at 69.95, here's a table showing how big the annual "dividend" (i.e. 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% 2.10 0.6
5% 3.50 1.0
10% 7.00 1.9

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 BLV Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 70.00 0.40 24 1.7 0.00 (0.0%)
Jun 18 70.00 1.40 177 0.8 0.00 (0.0%)
5% Yield On BLV Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 70.00 0.40 24 1.7 0.00 (0.0%)
Feb 20 70.00 0.75 59 1.3 0.00 (0.0%)

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Want more examples? BLOX Dividend | BLX Dividend