IEO Dividend Type Payments

iShares U.S. Oil & Gas Exploration & Production ETF dividend

Although IEO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares U.S. Oil & Gas Exploration & Production ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 10:30 AM ET):

iShares U.S. Oil & Gas Exploration & Production ETF (IEO)
Bid Ask Last Change Volume P/E Market Cap
89.47 89.59 89.53 -0.01 13K - 0.5B

IEO Dividend-Like Income Using Covered Calls

With IEO at 89.53, 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% 2.69 0.7
5% 4.48 1.2
10% 8.95 2.5

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 IEO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 90.00 0.60 24 2.5 0.41 (0.5%)
Sep 19 90.00 1.65 59 2.8 0.41 (0.5%)
5% Yield On IEO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 90.00 0.60 24 2.5 0.41 (0.5%)
Sep 19 90.00 1.65 59 2.8 0.41 (0.5%)
10% Yield On IEO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 90.00 0.60 24 2.5 0.41 (0.5%)
Sep 19 90.00 1.65 59 2.8 0.41 (0.5%)

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