TIP Dividend Type Payments

iShares TIPS Bond ETF dividend

Although TIP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares TIPS Bond 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):

iShares TIPS Bond ETF (TIP)
Bid Ask Last Change Volume P/E Market Cap
111.93 111.97 111.97 -0.01 1.7M - 13B

TIP Dividend-Like Income Using Covered Calls

With TIP at 111.97, 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% 3.36 0.9
5% 5.60 1.5
10% 11.20 3.1

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 TIP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 112.00 0.80 57 1.4 0.03 (0.0%)
Nov 21 112.00 0.45 29 1.6 0.03 (0.0%)
5% Yield On TIP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 21 112.00 0.45 29 1.6 0.03 (0.0%)

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Top 10 Open Interest For Nov 21 Expiration     Top 5 High Yield
1.IBIT dividend 6.TLT dividend   1.UUUU dividend
2.KVUE dividend 7.HYG dividend   2.CRML dividend
3.NVDA dividend 8.EEM dividend   3.UPST dividend
4.SLV dividend 9.QQQ dividend   4.RXRX dividend
5.GLD dividend 10.INTC dividend   5.LQDA dividend

Want more examples? TINY Dividend | TIPX Dividend