IYE Dividend Type Payments

iShares U.S. Energy ETF dividend

Although IYE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares U.S. Energy ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 12:45 PM ET):

iShares U.S. Energy ETF (IYE)
Bid Ask Last Change Volume P/E Market Cap
51.50 51.51 51.55 +1.13 756K - 2.3B

IYE Dividend-Like Income Using Covered Calls

With IYE at 51.55, 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% 1.55 0.4
5% 2.58 0.7
10% 5.16 1.4

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 IYE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 52.00 1.05 87 1.2 0.49 (1.0%)
Jul 17 52.00 1.55 178 0.9 0.49 (1.0%)
5% Yield On IYE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 52.00 1.05 87 1.2 0.49 (1.0%)
Jul 17 52.00 1.55 178 0.9 0.49 (1.0%)
10% Yield On IYE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 52.00 0.55 31 1.8 0.49 (1.0%)
Mar 20 52.00 1.05 59 1.8 0.49 (1.0%)

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