ZROZ Dividend Type Payments

Although ZROZ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PIMCO 25 Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

PIMCO 25 Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (ZROZ)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
65.00	67.43	65.35	-0.63	178K	-	0.0B

ZROZ Dividend-Like Income Using Covered Calls

With ZROZ at 65.35, 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%	1.96	0.5
5%	3.27	0.9
10%	6.54	1.8

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 ZROZ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	68.00	0.55	44	1.3	0.57 (0.9%)
Sep 19	68.00	1.25	79	1.6	0.57 (0.9%)

5% Yield On ZROZ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	68.00	0.55	44	1.3	0.57 (0.9%)
Sep 19	68.00	1.25	79	1.6	0.57 (0.9%)

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Want more examples? ZM Dividend | ZS Dividend