PepsiCo, Inc. (NASDAQ:PEP) will release earnings for its fourth quarter before the opening bell on Tuesday, Feb. 3.
Analysts expect the company to report quarterly earnings of $2.24 per share. That’s up from $1.96 per share in the year-ago period. The consensus estimate for PepsiCo's quarterly revenue is $28.97 billion (it reported $27.78 billion last year), according to Benzinga Pro.
Ahead of quarterly earnings, UBS analyst Peter Grom, on Jan. 14, maintained PepsiCo with a Buy and lowered the price target from $172 to $170.
With the recent buzz around PepsiCo, some investors may be eyeing potential gains from the company's dividends too. As of now, PepsiCo has an annual dividend yield of 3.70%, with a quarterly dividend of $1.4225 per share ($5.69 per year).
So, how can investors exploit its dividend yield to pocket a regular $500 monthly?
To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $161,926 or around 1,054 shares. For a more modest $100 per month or $1,200 per year, you would need $32,416 or around 211 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($5.69 in this case). So, $6,000 / $5.69 = 1,054 ($500 per month), and $1,200 / $5.69 = 211 shares ($100 per month).
Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
How that works: Compute the dividend yield by dividing the annual dividend payment by the stock’s current price.
For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40).
Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield.
PEP Price Action: Shares of PepsiCo rose by 3.3% to close at $153.63 on Friday.
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