How To Earn $500 A Month From Constellation Brands Stock Ahead Of Q4 Earnings

Zinger Key Points
  • An investor would need to own $447,587 worth of Constellation Brands to generate a monthly dividend income of $500.
  • A more conservative goal of $100 monthly dividend income would require owning 337 shares of Constellation Brands.

Constellation Brands, Inc. STZ is set to release earnings results for its fourth quarter (Q4) before the opening bell on April 11, 2024.
Some investors may be eyeing potential gains from the Victor, New York-based company’s dividends.

Constellation currently offers an annual dividend yield of 1.34%, which is a quarterly dividend amount of 89 cents per share ($3.56 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 $447,587 or around 1,685 shares. For a more modest $100 per month or $1,200 per year, you would need $89,517 or around 337 shares.

See Also: These 3 Tech And Telecom Stocks With Over 6% Dividend Yields Are Recommended By Wall Street's Most Accurate Analysts

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($3.56 in this case). So, $6,000 / $3.56 = 1,685 ($500 per month), and $1,200 / $3.56 = 337 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.

STZ Price Action: Shares of Constellation Brands gained 0.5% to close at $265.63 on Friday.

This week, analysts expect the beer and spirits company to report quarterly earnings at $2.09 per share, up from $1.98 per share in the year-ago period.

Constellation is projected to report quarterly revenue of $2.1 billion, compared to $2 billion in the year-earlier quarter, according to data from Benzinga Pro.

On April 5, Barclays analyst Lauren Lieberman maintained Constellation Brands with an Overweight and lowered the price target from $296 to $294.

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Image: Constellation Brands

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