How To Earn $500 A Month From Alphabet Stock

by Avi Kapoor Benzinga Staff Writer

Zinger Key Points

A more conservative goal of $100 monthly dividend income would require 1,500 shares of Alphabet.
An investor would need to own $1,434,300 worth of Alphabet to generate a monthly dividend income of $500.
Get New Picks of the Market's Top Stocks

Alphabet Inc. GOOGL GOOG shares closed slightly lower on Monday.

At a strategy meeting featuring Alphabet executives, CEO Sundar Pichai addressed key 2025 topics, including artificial intelligence, competition and regulatory pressure.

“The stakes are high,” Pichai said at the Dec. 18 gathering, as reported by CNBC. “I think 2025 will be critical. I think it’s really important we internalize the urgency of this moment and need to move faster as a company.”

On Dec. 23, B of A Securities analyst Justin Post maintained Alphabet with a Buy rating and maintained a $210 price target.

With the recent buzz around Alphabet, some investors may be eyeing potential gains from the company's dividends too. As of now, Alphabet offers an annual dividend yield of 0.42%, which is a quarterly dividend amount of 20 cents per share (80 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 $1,434,300 or around 7,500 shares. For a more modest $100 per month or $1,200 per year, you would need $286,860 or around 1,500 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.80 in this case). So, $6,000 / $0.80 = 7,500 ($500 per month), and $1,200 / $0.80 = 1,500 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.

GOOGL Price Action: Shares of Alphabet fell 0.8% to close at $191.24 on Monday.