Morgan Stanley (NYSE:MS) will release its second quarter earnings report before the opening bell on Wednesday, July 15.

Analysts expect the bank to report quarterly earnings of $2.81 per share, up from $2.13 per share in the year-ago period. The consensus estimate for Morgan Stanley’s quarterly revenue is $19.34 billion. It reported $16.79 billion last year, according to Benzinga Pro.

Ahead of quarterly earnings, UBS analyst Erika Najarian maintained Morgan Stanley with a Buy on July 7 and raised the price target from $214 to $255, while B of A Securities analyst Ebrahim Poonawala maintained the stock with a Buy and raised the price target from $225 to $250.

With the recent buzz around Morgan Stanley, some investors may be eyeing potential gains from the company’s dividends too. As of now, Morgan Stanley has an annual dividend yield of 1.80%, which is a quarterly dividend amount of $1.00 per share ($4.00 a 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 $333,420 or around 1,500 shares. For a more modest $100 per month or $1,200 per year, you would need $66,684 or around 300 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.00 in this case). So, $6,000 / $4.00 = 1,500 ($500 per month), and $1,200 / $4.00 = 300 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: The dividend yield is computed 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.

MS Price Action: Shares of Morgan Stanley rose 0.1% to close at $222.28 on Friday.

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