How To Earn $500 A Month From Citigroup Stock

Oppenheimer analyst Chris Kotowski upgraded shares of Citigroup, Inc C to an Outperform rating and lifted the price target from $84 to $88.

The analyst said that Citigroup, with a tangible book value of 0.59x, is still one of the cheapest banks on the market. He further noted that Citigroup’s underlying operating trends closely reflect its second-quarter full-year 2023 results, which beat Street consensus.

Citigroup reported a 1% year-over-year decline in net revenue to $19.44 billion, beating of the estimated $19.27 billion. The bank posted an EPS of $1.33, above $1.30 estimates. It also completed a billion dollars worth of share buy-backs over the last quarter, reducing the total share count by 35% since 2015.

While Citigroup anticipates full-year 2023 adjusted revenue to range between $78 billion and $79 billion, Kotowski believes that the potential to shrink the share count is enormous, paving the way for patient shareholders to reap rewards.

In addition to solid performance, Citigroup’s healthy dividend yield of 4.28% provides an opportunity for income-focused investors.

For those aiming to earn $500 per month from dividends, they would need to hold about $140,186.92 in the stock or roughly 3,032 shares.

On a smaller scale, a monthly income target of $100 would require about $28,037.38 or about 606 shares.

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So how does this work? The calculation involves translating the monthly target into an annual figure ($500 x 12 months equals $6,000 per year), which is then divided by Citigroup’s dividend yield. For a $500 monthly income, the equation would look like this: 6000 / 0.0428 = $140,186.92.

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.

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