How To Earn $500 A Month From McKesson Stock Ahead Of Q4 Earnings Report

Zinger Key Points
  • A more conservative goal of $100 monthly dividend income would require owning 484 shares of McKesson.
  • An investor would need to own $1,290,319 worth of McKesson to generate a monthly dividend income of $500.

Analysts expect McKesson Corporation MCK to report fourth-quarter earnings of $6.34 per share after the closing bell on May 7.

That’s down from $7.19 per share in the year-ago period.

However, the Irving, Texas-based company is projected to post revenue of $79.32 billion, compared to $68.91 billion a year earlier, per Benzinga Pro. With the recent buzz around McKesson, some investors may be eyeing potential gains from the company's dividends, too.

McKesson currently offers an annual dividend yield of 0.46%, which is a quarterly dividend amount of 62 cents per share ($2.48 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 $1,290,319. That’s around 2,419 shares. For a more modest $100 per month, or $1,200 per year, you would need $258,170 or around 484 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.48 in this case). So, $6,000 / $2.48 = 2,419 ($500 per month), and $1,200 / $2.48 = 484 shares ($100 per month).

The dividend yield can change on a rolling basis (dividend payments and the stock price 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.

MCK Price Action: Shares of McKesson gained 0.9% to close at $533.41 on Monday.

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