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

The Home Depot, Inc. HD will release earnings results for the second quarter, before the opening bell on Tuesday, Aug. 19.

Analysts expect the home improvement retailer to report quarterly earnings at $4.69 per share, up from $4.60 per share in the year-ago period. Home Depot projects to report quarterly revenue of $45.31 billion. Compare that to the $43.17 billion it generated last year during the second quarter, according to data from Benzinga Pro.

With the recent buzz around Home Depot, some investors may be eyeing potential gains from the company's dividends. Currently, it offers an annual dividend yield of 2.30%, which is a quarterly dividend amount of $2.30 per share ($9.20 a year).  

So, how can investors capitalize on its dividend yield to earn a regular $500 monthly?

To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $260,396 or around 652 shares. For a more modest $100 per month or $1,200 per year, you would need $51,919 or around 130 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($9.20 in this case). So, $6,000 / $9.20 = 652 ($500 per month), and $1,200 / $9.20 = 130 shares ($100 per month).

Note that the dividend yield can change on a rolling basis, as both the dividend payment and the stock price fluctuate over time.

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 currently 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 remains unchanged. Conversely, if the dividend payment decreases, so will the yield.

HD Price Action: Shares of Home Depot fell 0.2% to close at $399.38 on Friday.

On Wednesday, Truist Securities analyst Scot Ciccarelli maintained Home Depot with a Buy and raised the price target from $417 to $433, while Telsey Advisory Group analyst Joseph Feldman maintained the stock with an Outperform rating and maintained a $455 price target.

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