SCHA Dividend Type Payments
Although SCHA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Schwab U.S. Small-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):
| Schwab U.S. Small-Cap ETF (SCHA) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 26.50 | 26.88 | 26.64 | -0.38 | 1.8M | - | 18B |
SCHA Dividend-Like Income Using Covered Calls
With SCHA at 26.64, 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% | 0.80 | 0.2 |
| 5% | 1.33 | 0.4 |
| 10% | 2.66 | 0.7 |
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 SCHA Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Dec 20 | 28.00 | 0.10 | 36 | 0.3 | 1.12 (4.2%) | |
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| Top 10 Open Interest For Dec 20 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | QQQ dividend | 1. | SAVA dividend | |
| 2. | SPY dividend | 7. | XLF dividend | 2. | RKLB dividend | |
| 3. | EEM dividend | 8. | KWEB dividend | 3. | LUNR dividend | |
| 4. | FXI dividend | 9. | TLT dividend | 4. | NMRA dividend | |
| 5. | IWM dividend | 10. | KRE dividend | 5. | CRVS dividend | |
Want more examples? SCCO Dividend | SCHB Dividend
