ITA Dividend Type Payments

iShares U.S. Aerospace & Defense ETF dividend

Although ITA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares U.S. Aerospace & Defense ETF 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):

iShares U.S. Aerospace & Defense ETF (ITA)
Bid Ask Last Change Volume P/E Market Cap
155.62 159.84 157.32 +1.49 206K - 6.5B

ITA Dividend-Like Income Using Covered Calls

With ITA at 157.32, 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% 4.72 1.3
5% 7.87 2.2
10% 15.73 4.3

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 ITA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 160.00 2.80 72 3.9 0.16 (0.1%)
Oct 17 160.00 7.60 255 3.0 0.16 (0.1%)
5% Yield On ITA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 160.00 2.80 72 3.9 0.16 (0.1%)
Oct 17 160.00 7.60 255 3.0 0.16 (0.1%)

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