VV Dividend Type Payments

Vanguard Large-Cap ETF dividend

Although VV has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Vanguard Large-Cap 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 Large-Cap ETF (VV)
Bid Ask Last Change Volume P/E Market Cap
316.66 317.06 316.71 +0.55 223K - 17B

VV Dividend-Like Income Using Covered Calls

With VV at 316.71, 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% 9.50 2.6
5% 15.84 4.3
10% 31.67 8.7

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 VV Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 320.00 2.50 43 5.8 2.94 (0.9%)
Apr 17 320.00 10.00 134 7.5 2.94 (0.9%)
5% Yield On VV Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 320.00 2.50 43 5.8 2.94 (0.9%)
Apr 17 320.00 10.00 134 7.5 2.94 (0.9%)

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