How To Earn $500 A Month From Procter & Gamble Stock Ahead Of Q3 Earnings

Procter & Gamble Company PG will release third-quarter earnings results before the opening bell on Thursday, April 24.

Analysts expect the Cincinnati, Ohio-based company to report quarterly earnings at $1.53 per share, up from $1.52 per share in the year-ago period. Procter & Gamble projects to report quarterly revenue at $20.15 billion, compared to $20.2 billion a year earlier, according to data from Benzinga Pro.

On Tuesday, RBC Capital analyst Nik Modi reiterated Procter & Gamble with a Sector Perform rating and maintained a $164 price target.

With the recent buzz around Procter & Gamble, some investors may be eyeing potential gains from the company's dividends too. Currently, Procter & Gamble offers an annual dividend yield of 2.52%. That’s a quarterly dividend amount of $1.06 per share ($4.227 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 $238,222 or around 1,419 shares. For a more modest $100 per month or $1,200 per year, you would need $47,678 or around 284 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.227 in this case). So, $6,000 / $4.227 = 1,419 ($500 per month), and $1,200 / $4.227 = 284 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.

PG Price Action: Shares of Procter & Gamble gained 1.3% to close at $167.88 on Tuesday.

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