VB Dividend Type Payments

Vanguard Small-Cap ETF dividend

Although VB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard Small-Cap ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 3:00 PM ET):

Vanguard Small-Cap ETF (VB)
Bid Ask Last Change Volume P/E Market Cap
242.14 242.23 242.17 +1.53 490K - 18B

VB Dividend-Like Income Using Covered Calls

With VB at 242.17, 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% 7.27 2.0
5% 12.11 3.3
10% 24.22 6.6

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 VB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 245.00 4.80 39 12.3 2.77 (1.1%)
Jul 18 245.00 1.45 11 13.2 2.77 (1.1%)
5% Yield On VB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 245.00 4.80 39 12.3 2.77 (1.1%)
Jul 18 245.00 1.45 11 13.2 2.77 (1.1%)
10% Yield On VB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 245.00 4.80 39 12.3 2.77 (1.1%)
Jul 18 245.00 1.45 11 13.2 2.77 (1.1%)

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Want more examples? VAW Dividend | VBK Dividend