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Following its acquisition of First Republic Bank (FRC), JPMorgan Chase & Co (NYSE:JPM) raised its performance targets, telling investors Monday at its investor conference that it expects an increase of about $3 billion in net interest income for the year.
With the revisions, the bank anticipates a total of $84 billion in net interest income.
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Despite uncertainties around deposits and economic conditions, JPMorgan leveraged the recent regional banking chaos to its advantage, bolstering its presence as the largest U.S. bank.
The government-brokered takeover of FRC, coupled with the expansion of its high-net-worth clientele, could translate into potential benefits for dividend investors.
So, the question arises — how much JPM stock would an investor need to own to yield a monthly income of $500 in dividends?
To determine how much JPM stock an investor would need to own in order to yield $500 per month in dividends, we can start by calculating the annual dividend income required: $500 x 12 months = $6,000.
Given JPM’s current dividend yield of about 2.9%, we divide the annual income by the dividend yield: $6,000 / 0.029 equals $206,000.
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This means that an investor would need to own approximately $206,000 worth of JPM stock, or 1,495 shares, to generate a monthly dividend income of $500.
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.
Although JPMorgan’s augmented income outlook and acquisition of First Republic present promising prospects, the bank also forecasted that expenses will rise to $84.5 billion, excluding the $3.5 billion associated with First Republic’s integration.
Those variables, combined with other market dynamics, could influence JPM’s stock price and consequently, the dividend yield.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.