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

HP Inc. HPQ will release its second-quarter financial results after the closing bell on Wednesday, May 28.

Analysts expect the Palo Alto, California-based company to report quarterly earnings at 80 cents per share, down from 82 cents per share in the year-ago period. HP projects quarterly revenue of $13.15 billion, compared to $12.80 billion a year earlier, according to data from Benzinga Pro.

On May 21, Morgan Stanley analyst Erik Woodring maintained HP with an Equal-Weight rating. He also raised the price target from $25 to $29.

With the recent buzz around HP, some investors may be eyeing potential gains from the company's dividends. Currently, HP offers an annual dividend yield of 4.09% — a quarterly dividend of 29 per share ($1.158 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 $1.158 dividend: $6,000 / 1.158 = 5,181 shares.

So, an investor would need to own approximately $146,830 worth of HP, or 5,181 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 / $1.158 = 1,036 shares, or $29,360 to generate a monthly dividend income of $100.

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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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 by 1.3% to close at $28.34 on Tuesday.

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