Packaged meat company Smithfield Foods, Inc. (NASDAQ:SFD) will release earnings for its fourth quarter before the opening bell on Tuesday, March 24. Analysts expect quarterly earnings of 68 cents per share. That’s up from 52 cents per share in the year-ago period.
The consensus estimate for Smithfield Foods' quarterly revenue is $4.15 billion; it reported $3.95 billion last year, according to Benzinga Pro.
With the recent buzz around Smithfield Foods, including its recent January acquisition of Nathan's Famous, Inc. (NASDAQ:NATH),some investors may be eyeing potential gains from the company's dividends too. As of now, Smithfield Foods has an annual dividend yield of 4.33%, with a quarterly dividend of 25 cents per share ($1.00 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 $138,660 or around 6,000 shares. For a more modest $100 per month or $1,200 per year, you would need $27,732 or around 1,200 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.00 in this case). So, $6,000 / $1.00 = 6,000 ($500 per month), and $1,200 / $1.00 = 1,200 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.
SFD Price Action: Shares of Smithfield Foods fell 1.9% to close at $23.11 on Thursday.
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