How To Earn $500 A Month From General Motors 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 2,500 shares of GM.
An investor would need to own $677,750 worth of GM to generate a monthly dividend income of $500.
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General Motors Company GM will release its fourth-quarter financial results, after the closing bell, on Tuesday, Jan. 28, 2025.

Analysts expect the Detroit, Michigan-based company to report quarterly earnings at $1.8 per share, up from $1.24 per share in the year-ago period. General Motors projects quarterly revenue of $43.28 billion, compared to $42.98 billion a year earlier, according to data from Benzinga Pro.

General Motors shares rose on Thursday on reports the company and Hyundai are forging an EV partnership for North America.

With the recent buzz around GM, some investors may also be eyeing potential gains from the company's dividends. Currently, GM offers an annual dividend yield of 0.89%, a quarterly dividend amount of 12 cents per share (48 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 $677,750 or around 12,500 shares. For a more modest $100 per month or $1,200 per year, you would need $135,550 or around 2,500 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.48 in this case). So, $6,000 / $0.48 = 12,500 ($500 per month), and $1,200 / $0.48 = 2,500 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.

GM Price Action: Shares of GM gained 2.8% to close at $54.22 on Thursday.