Microsoft Corporation (NASDAQ:MSFT) will release earnings for the second quarter after the closing bell on Wednesday, Jan. 28.
Analysts expect the company to report earnings of $3.97 per share. That's up from $3.23 per share in the year-ago period. The consensus estimate for Microsoft's quarterly revenue is $80.27 billion (it reported $69.63 billion last year), according to Benzinga Pro. Bank of America Securities analyst Brad Sills maintains a Buy and lowered the price target from $640 to $520.
With the recent buzz around Microsoft, some investors may be eyeing potential gains from the company's dividends. As of now, Microsoft has an annual dividend yield of 0.76%, with a quarterly dividend of 91 cents per share ($3.64 a year).
To figure out how to earn $500 monthly from Microsoft, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we divide this amount by Microsoft's $3.64 dividend: $6,000 / $3.64 = 1,648 shares.
So, an investor would need to own approximately $791,996 worth of Microsoft, or 1,648 shares to generate a monthly dividend income of $500.
Assuming a more conservative goal of $100 monthly ($1,200 annually), we perform the same calculation: $1,200 / $3.64 = 330 shares, or $158,591 to generate $100 in monthly dividend income.
Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.
For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).
Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).
Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.
MSFT Price Action: Shares of Microsoft gained by 2.2% to close at $480.58 on Tuesday.
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