How To Earn $500 A Month From ConAgra Brands Stock After Upbeat Earnings

Zinger Key Points
  • An investor would need to own $131,323 worth of ConAgra Brands to generate a monthly dividend income of $500.
  • A more conservative goal of $100 monthly dividend income would require owning 857 shares of ConAgra Brands.

ConAgra Brands Inc CAG reported better-than-expected third-quarter financial results on Thursday.

On the heels of that news, some investors may be eyeing potential gains from the company’s dividends.

Currently, ConAgra Brands — owner of brands like Reddi-wip, Healthy Choice and Marie Callender's — offers an annual dividend yield of 4.57%. That's a quarterly dividend amount of 35 cents per share ($1.40 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 $131,323 or around 4,286 shares. For a more modest $100 per month or $1,200 per year, you would need $26,258 or around 857 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.40 in this case). So, $6,000 / $1.40 = 4,286 ($500 per month), and $1,200 / $1.40 = 857 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.

CAG Price Action: Shares of Conagra Brands gained 5.4% to close at $30.64 on Thursday.

The Chicago-based company reported a third-quarter FY24 sales decline of 1.7% year-on-year to $3.03 billion, beating the analyst consensus estimate of $3.01 billion.

Adjusted EPS of 69 cents beat the consensus estimate of 65 cents, according to data from Benzinga Pro.

ConAgra reaffirmed its outlook for FY24 organic net sales to decrease between 1% and 2% compared to fiscal 2023. It continues to see adjusted EPS of between $2.60 and $2.65 against an estimate of $2.60.

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