IVOO Dividend Type Payments

Vanguard S&P Mid-Cap 400 ETF dividend

Although IVOO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard S&P Mid-Cap 400 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 Mid-Cap 400 ETF (IVOO)
Bid Ask Last Change Volume P/E Market Cap
109.49 109.67 109.60 +0.48 93K - 0.0B

IVOO Dividend-Like Income Using Covered Calls

With IVOO at 109.60, 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% 3.29 0.9
5% 5.48 1.5
10% 10.96 3.0

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 IVOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 110.00 2.60 91 2.9 0.33 (0.3%)
Jul 18 110.00 4.30 183 2.3 0.33 (0.3%)
5% Yield On IVOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 110.00 2.60 91 2.9 0.33 (0.3%)
Jul 18 110.00 4.30 183 2.3 0.33 (0.3%)
10% Yield On IVOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 21 110.00 2.00 64 3.1 0.33 (0.3%)

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