How To Earn $500 A Month From HP Stock Ahead Of Q2 Earnings Report

Zinger Key Points
  • A more conservative goal of $100 monthly dividend income would require owning 1,089 shares of HP.
  • An investor would need to own $180,447 worth of HP to generate a monthly dividend income of $500.

HP Inc. HPQ is scheduled to release earnings results for its second quarter, after the closing bell on Wednesday.

Analysts expect the Palo Alto, California-based company to report quarterly earnings at 81 cents per share, up from 80 cents per share in the year-ago period. HP is projected to report quarterly revenue of $12.6 billion, according to data from Benzinga Pro.

On May 21, Barclays analyst Tim Long upgraded the rating for HP from Underweight to Equal-Weight, while increasing the price target from $24 to $30.

With the recent buzz around HP, some investors may be eyeing potential gains from the company's dividends. As of now, HP has a dividend yield of 3.33%, which is a quarterly dividend amount of 27.56 cents a share ($1.102 a year).

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

Next, we take this amount and divide it by HP's $1.102 dividend: $6,000 / $1.102  = 5,445 shares

So, an investor would need to own approximately $180,447 worth of HP, or 5,445 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 / $1.102 = 1,089 shares, or $36,089 to generate a monthly dividend income of $100.

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

HPQ Price Action: Shares of HP gained 1.2% to close at $33.14 on Tuesday.

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