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

by Avi Kapoor Benzinga Staff Writer

Zinger Key Points

A more conservative goal of $100 monthly dividend income would require 1,364 shares of Occidental Petroleum.
An investor would need to own $327,673 worth of Occidental Petroleum to generate a monthly dividend income of $500.
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Occidental Petroleum Corporation OXY will release its fourth-quarter financial results, after the closing bell, on Tuesday, Feb. 18.

Analysts expect the Houston-based company to report quarterly earnings at 67 cents per share, down from 74 cents per share in the year-ago period. Occidental Petroleum projects quarterly revenue of $7.14 billion, compared to $7.53 billion a year earlier, according to data from Benzinga Pro.

On Jan. 31, Goldman Sachs downgraded the stock from Neutral to Sell and cut its price target from $54 to $45.

With the recent buzz around Occidental Petroleum, some investors may be eyeing potential gains from the company's dividends. Occidental Petroleum currently offers an annual dividend yield of 1.83%, which is a quarterly dividend amount of 22 cents per share (88 cents 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 $327,673 or around 6,818 shares. For a more modest $100 per month or $1,200 per year, you would need $65,554 or around 1,364 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.88 in this case). So, $6,000 / $0.88 = 6,818 ($500 per month), and $1,200 / $0.88 = 1,364 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.

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 stays the same. Conversely, if the dividend payment decreases, so will the yield.

OXY Price Action: Shares of Occidental Petroleum gained 0.4% to close at $48.06 on Friday.