Alcoa Corporation (NYSE:AA) will release its second-quarter earnings report after the closing bell on Thursday, July 16.

Analysts expect the company to report quarterly earnings of $2.19 per share, up from 39 cents per share in the year-ago period. The consensus estimate for Alcoa’s quarterly revenue is $4.16 billion. It reported $3.02 billion last year, according to Benzinga Pro.

Ahead of quarterly earnings, Morgan Stanley analyst Carlos De Alba downgraded Alcoa from Overweight to Equal-Weight on July 8 and lowered the price target from $79 to $53.

With the recent buzz around Alcoa, some investors may be eyeing potential gains from the company’s dividends too. As of now, Alcoa has an annual dividend yield of 0.82%, which is a quarterly dividend amount of 10 cents per share (40 cents a year).  

So, how can investors use its dividend yield to pocket a regular $500 per month?

To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $728,700 or around 15,000 shares. For a more modest $100 per month or $1,200 per year, you would need $145,740 or around 3,000 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.40 in this case). So, $6,000 / $0.40 = 15,000 ($500 per month), and $1,200 / $0.40 = 3,000 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.

AA Price Action: Shares of Alcoa fell 1% to close at $48.58 on Wednesday.

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