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How to earn $500 a month from Dow stock ahead of Q2 earnings

A United States Treasury check with the Statue of Liberty surrounded by scattered US dollar bills.
A United States Treasury check with the Statue of Liberty surrounded by scattered US dollar bills.

Dow Inc. DOW will release earnings for its second quarter before the opening bell on Thursday, July 23. Analysts expect the company to report quarterly earnings of $1.28 per share, versus a loss of 42 cents per share in the year-ago period. The consensus estimate for Dow’s quarterly revenue is $12.18 billion. It reported $10.1 billion last year, according to Benzinga Pro. Ahead of quarterly earnings, Morgan Stanley analyst Vincent Andrews...

Dow Inc. DOW will release earnings for its second quarter before the opening bell on Thursday, July 23.

Analysts expect the company to report quarterly earnings of $1.28 per share, versus a loss of 42 cents per share in the year-ago period. The consensus estimate for Dow’s quarterly revenue is $12.18 billion. It reported $10.1 billion last year, according to Benzinga Pro.

Ahead of quarterly earnings, Morgan Stanley analyst Vincent Andrews maintained Dow with an Equal-Weight rating on Monday and lowered the price target from $41 to $39.

With the recent buzz around Dow, some investors may be eyeing potential gains from the company’s dividends too. As of now, Dow has an annual dividend yield of 4.59%, which is a quarterly dividend amount of 35 cents per share ($1.40 a year).

To figure out how to earn $500 monthly from Dow, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by Dow’s $1.40 dividend: $6,000 / $1.40 = 4,286 shares.

So, an investor would need to own approximately $130,594 worth of Dow, or 4,286 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $1.40 = 857 shares, or $26,113 to generate a monthly dividend income of $100.

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.

DOW Price Action: Shares of Dow gained by 0.3% to close at $30.47 on Tuesday.

Image via Jason Raff/Shutterstock

This article How to Earn $500 a Month From Dow Stock Ahead of Q2 Earnings originally appeared on Benzinga.com.

Read full story on Benzinga

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