How To Earn $500 A Month From Cisco Stock Ahead Of Q3 Earnings

Zinger Key Points
  • A more conservative goal of $100 monthly dividend income would require owning 750 shares of Cisco.
  • An investor would need to own $180,225 worth of Cisco to generate a monthly dividend income of $500.

Cisco Systems, Inc. CSCO is expected to release earnings results for its third quarter, after the closing bell on May 15.

Analysts expect the San Jose, California-based company to report quarterly earnings at 83 cents per share, down from 86 cents per share in the year-ago period. Data from Benzinga Pro projects Cisco will post quarterly revenue of $12.5 billion.

On March 25, Cisco announced new multifunctional collaboration devices for hybrid work.

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With the recent buzz around Cisco, some investors may be eyeing potential gains from the company's dividends. As of now, Cisco has a dividend yield of 3.33%, which is a quarterly dividend amount of 40 cents a share ($1.60 a year).

To figure out how to earn $500 monthly from Cisco, we start with a yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by Cisco's $1.60 dividend: $6,000 / $1.60  = 3,750 shares

So, an investor would need to own approximately $180,225 worth of Cisco, or 3,750 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $1.60 = 750 shares, or $36,045 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis. 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 will 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, impacting the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, the dividend yield will decrease if a company decreases its dividend payment.

CSCO Price Action: Shares of Cisco rose 0.6% to close at $48.06 on Friday.

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