How To Earn $500 A Month From Wells Fargo Stock After Earnings Beat

Wells Fargo & Co WFC on Friday issued upbeat second-quarter earnings, topping Street estimates on both top and bottom lines. Here's what investors need to know.

By The Numbers: The San Francisco-based bank issued earnings of $1.25 per share, ahead of the $1.15 estimate, on revenues of $20.533 billion, ahead of the $20.07 billion consensus estimate.

Wells Fargo posted a net income of $4.9 billion, up from the $3.1 billion seen in the same quarter last year, with the increase largely attributed to higher interest rates.

The bank said it anticipated net interest income to climb by 14% this year, compared to the previous 10% projection.

Wells Fargo's noninterest expenses rose by roughly 1% year-over-year, and the company repurchased 100.2 million shares during the quarter, totaling a $4 billion buyback.

Shares are mostly quiet, with the stock trading 0.55% lower at the time of writing, though we're here for its dividends.

With a current dividend yield of 2.75%, how can an investor yield $500 per month from the stock?

For those seeking a monthly income of $500 through dividends, they would need to hold approximately $218,181.81 in the stock, or 5,019 shares.

For a more modest target of $100 monthly, an investment of $43,636 or about 1,004 shares would be necessary.

Read Also: How To Earn $500 A Month From UWM Holdings Corp Stock

Here's The Math: The monthly target of $500 translates to $6,000 per year ($500 x 12 months).

Dividing the $6,000 by Wells Fargo's 2.75% yield would look like this: 6000 / 0.0275 = $218,181.81.

Similarly, a $100 monthly target would be $1,200 per year: 1200 / 0.0275 = $43,636.

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.

For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).

Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).

Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.

Read next: How To Earn $500 A Month From AT&T Stock