VET Dividend Type Payments

Vermilion Energy Inc. Common (Canada) dividend

Although VET has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vermilion Energy Inc. Common (Canada) to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

Vermilion Energy Inc. Common (Canada) (VET)
Bid Ask Last Change Volume P/E Market Cap
7.50 7.62 7.57 -0.12 2.2M - 0.9B

VET Dividend-Like Income Using Covered Calls

With VET at 7.57, 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% 0.23 0.1
5% 0.38 0.1
10% 0.76 0.2

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 VET Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 10.00 0.25 199 0.1 2.38 (31.4%)
Jun 20 10.00 0.10 108 0.1 2.38 (31.4%)
5% Yield On VET Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 10.00 0.25 199 0.1 2.38 (31.4%)
Jan 16 10.00 0.50 318 0.2 2.38 (31.4%)

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