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

Target Corporation TGT will release its fourth-quarter financial results, before the opening bell, on Tuesday, March 4.

Analysts expect the retailer to report quarterly earnings at $2.25 per share, down from $2.98 per share in the year-ago period. Target projects quarterly revenue of $30.85 billion, compared to $31.92 billion a year earlier, according to data from Benzinga Pro.

On Feb. 26, JP Morgan analyst Christopher Horvers maintained Target with a Neutral and raised the price target from $139 to $146.

With the recent buzz around Target, some investors may be eyeing potential gains from the company's dividends too. As of now, Target offers an annual dividend yield of 3.61%, which is a quarterly dividend amount of $1.12 per share ($4.48 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 $164,028 or around 1,339 shares. For a more modest $100 per month or $1,200 per year, you would need $32,830 or around 268 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.48 in this case). So, $6,000 / $4.48 = 1,339 ($500 per month), and $1,200 / $4.48 = 268 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.

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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 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.

TGT Price Action: Shares of Target fell 1.2% to close at $122.50 on Thursday.

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