LTPZ Dividend Type Payments
Although LTPZ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Pimco 15 Year U.S. TIPS 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 Wed 4:16 PM ET):
| Pimco 15 Year U.S. TIPS Index Exchange-Traded Fund (LTPZ) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 52.87 |
52.96 |
53.05 |
-0.58 |
238K |
- |
0.0B |
LTPZ Dividend-Like Income Using Covered Calls
With LTPZ at 53.05, 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% |
1.59 |
0.4 |
| 5% |
2.65 |
0.7 |
| 10% |
5.31 |
1.5 |
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 LTPZ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
53.00 |
0.10 |
3 |
3.3 |
0.04 (0.1%) |
| Jan 17 |
53.00 |
0.55 |
31 |
1.8 |
0.04 (0.1%) |
| 5% Yield On LTPZ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
53.00 |
0.10 |
3 |
3.3 |
0.04 (0.1%) |
| Jan 17 |
53.00 |
0.55 |
31 |
1.8 |
0.04 (0.1%) |
| 10% Yield On LTPZ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
53.00 |
0.10 |
3 |
3.3 |
0.04 (0.1%) |
| Jan 17 |
53.00 |
0.55 |
31 |
1.8 |
0.04 (0.1%) |
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