How To Earn $500 A Month From Nvidia Stock Ahead Of Q1 Earnings Report

Zinger Key Points
  • A more conservative goal of $100 monthly dividend income would require owning 7,500 shares of Nvidia.
  • An investor would need to own over $32 million worth of Nvidia to generate a monthly dividend income of $500.

Nvidia Corporation NVDA shares closed higher on Thursday as semiconductor stocks recorded gains following strong quarterly results from Qualcomm QCOM.

The Federal Open Market Committee (FOMC) did not intend to raise rates and is still open to lowering them before the year is out. The semiconductor industry, a high-growth sector, responded well to the news. Typically, investors are scared away from high-growth equities in high-interest rate environments.

Nvidia is scheduled to host a conference call on Wednesday, May 22, to discuss its financial results for the first quarter of fiscal year 2025.

Analysts expect the company to report quarterly earnings at $5.55 per share on revenue of $24.49 billion.

With the recent buzz around Nvidia, some investors may be eyeing potential gains from the company's dividends, too. As of now, Nvidia offers an annual dividend yield of 0.02%, which is a quarterly dividend amount of 4 cents per share (16 cents 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 $32,181,375 or around 37,500 shares. For a more modest $100 per month or $1,200 per year, you would need $6,436,275 or around 7,500 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.16 in this case). So, $6,000 / $0.16 = 37,500 ($500 per month), and $1,200 / $0.16 = 7,500 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.

NVDA Price Action: Shares of Nvidia gained 3.3% to close at $858.17 on Thursday.

Read More: Top 4 Defensive Stocks You’ll Regret Missing This Quarter

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