How to Earn $500 Per Month From Emerson Electric in Dividends

Emerson Electric Co EMR is a Missouri-based industrial and automation solutions company. With 67 years of consecutive dividend growth under its belt, it's one of the most sought-after dividend stocks, and Wall Street has been paying attention to it lately. 

Following upbeat fiscal second-quarter results in May, Deutsche Bank upgraded Emerson Electric to Buy from Neutral and increased its price target to $138 from $123. Analysts expect Emerson Electric's fiscal 2025 EPS to be 4% ahead of the Street's consensus estimate. During the second quarter, Emerson Electric's adjusted EPS reached $1.36, surpassing the Street's view by $0.11. Revenue in the quarter jumped 16.5% year over year to $4.38 billion, beating estimates by $90 million.

In late June, Deutsche Bank reiterated that Emerson Electric is poised for gains amid underperformance since its last earnings report. The bank expects Emerson to "materially" beat the Street's view on the upcoming earnings report. 

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Emerson Electric's Growth Catalyst: Industrial Automation and Software

Analysts believe the biggest growth catalyst for Emerson Electric is its huge focus on industrial automation. As companies begin to automate workflows and production lines to cut costs and improve efficiency, Emerson Electric's industrial automation business, which includes valves, smart monitors and analyzers, will see a rise in demand. The company is also foraying into the lucrative industrial software business. In 2021, the company said it would merge its software unit business, Aspen Technology, in an $11 billion deal. This combination resulted in the formation of AspenTech. Last year, it completed its $8.2 billion acquisition of software-connected automated test and measurement systems company National Instruments Corporation. All of these growth initiatives are paying off. The Software & Control segment saw a 14% year-over-year revenue growth in the second quarter, while the AspenTech business grew by 21%.

Amid these strong growth catalysts, it'd be interesting to see how much you need to invest to earn $500 a month in dividends from Emerson Electric.

How to Make $500 Per Month in Dividends from Emerson Electric

First, we will calculate the number of Emerson Electric shares you must buy to reach the $500 monthly goal. An income of $500 per month means you will generate $6,000 per year in dividends. Emerson Electric pays a quarterly dividend of $0.525 per share, which amounts to $2.1 annually ($0.525 x 4 = $2.1).

Now, let's calculate the number of shares you need to buy:

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Number of shares needed = $6,000 / $2.1 = 2,857.14

To earn $500 a month from Emerson Electric, you need to buy approximately 2,857 shares of the company.

Total Investment Needed to Earn $500 a Month from Emerson Electric

To calculate the investment needed to reach the $500/month goal in dividends from Emerson Electric, we multiply the total number of shares by the stock’s latest price. Emerson Electric closed at $109.56 on July 3.

Total Investment Needed to Earn $500/month from Emerson Electric Dividends = $109.56 x 2,857 = $313,012.92

You’d need to invest about $313,013 in Emerson Electric to start earning $500 per month in dividends.

While Emerson Electric's dividend looks safe, thanks to its payout ratio of 38% and strong cash position, it'd be wise to consider risks before investing a hefty amount to earn dividend income. Emerson Electric is now banking too much on industrial and software business. Any prolonged industrial activity and spending slowdown amid higher rates and inflation could affect the stock in the short term. The company also saw mid-single-digit declines in discrete automation, with more headwinds expected in the near future. 

There Are Better High-Yield Opportunities

The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider. 

For instance, Basecamp Alpine Notes offers a target APY of 9% with a term of only three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple has issued 61 Alpine Notes Series and has met all payment and funding obligations with no missed or late interest payments. With a low minimum investment of just $1,000, Basecamp Alpine Notes makes it easier than ever to start building a high-yield portfolio. 

Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings. 

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