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

Could Cisco Systems, Inc.‘s CSCO latest earnings report hold the key to unlocking a steady stream of passive income for investors? Cisco will release financial results for the fourth quarter after the closing bell on Wednesday, Aug. 13.

Analysts expect the company to report quarterly earnings at 98 cents per share, up from 87 cents per share in the year-ago period. Cisco projects to report quarterly revenue at $14.62 billion, compared to $13.64 billion a year earlier, according to data from Benzinga Pro.

On August 5, UBS analyst David Vogt maintained a Neutral rating for Cisco and raised the price target from $70 to $74.

With the recent buzz around Cisco, some investors may be eyeing potential gains from the company's dividends. As of now, Cisco offers an annual dividend yield of 2.32%, which is a quarterly dividend amount of 41 cents per share ($1.64 a year).

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

Next, we take this amount and divide it by Cisco's $1.64 dividend: $6,000 / $1.64 = 3,659 shares.

So, an investor would need to own approximately $258,582 worth of Cisco, or 3,659 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 / $1.64 = 732 shares, or $51,730 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.

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.

CSCO Price Action: Shares of Cisco fell by 1.6% to close at $70.67 on Monday.

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