How To Earn $500 A Month From CVS Health Stock

Zinger Key Points
  • A more conservative goal of $100 monthly dividend income would require owning 451 shares of CVS Health.
  • An investor would need to own $136,939 worth of CVS Health to generate a monthly dividend income of $500.

CVS Health Corporation PVH shares closed slightly higher during Wednesday's session.

On May 30, JPMorgan analyst Lisa Gill maintained CVS Health with an Overweight. She also lowered the price target from $101 to $86. Baird analyst Michael Ha initiated coverage on CVS Health with a Neutral rating and announced a price target of $61.

On May 1, CVS Health reported first-quarter sales of $88.4 billion, up 3.7% year over year. It missed the consensus of $89.21 billion. The company also lowered its 2024 adjusted EPS guidance to at least $7.00 from at least $8.30 versus consensus of $8.27.

With the recent buzz around CVS Health, some investors may be eyeing potential gains from the company's dividends. CVS Health currently has a dividend yield of 4.38%. That’s a quarterly dividend amount of 66.5 cents a share ($2.66 a year).

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

Next, we take this amount and divide it by CVS Health's $2.66 dividend: $6,000 / $2.66  = 2,256 shares

So, an investor would need to own approximately $136,939 worth of CVS Health, or 2,256 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 / $2.66 = 451 shares, or $27,376 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.

CVS Price Action: Shares of CVS Health gained 0.7% to close at $60.70 on Wednesday.

Read More: How to Find Dividend Stocks: Scan, Analyze, and Capture with Benzinga Pro

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