How To Earn $500 A Month From FedEx While It Takes UPS Market Share

FedEx Corp FDX is enjoying the spoils of United Parcel Service Inc’s UPS costly labor dispute from earlier in the summer. Over the past year, shares of FedEx have climbed nearly 61%, buoyed by a promising $6 billion cost-reduction initiative.

With UPS incurring a $30 billion hit due to a five-year wage and benefit agreement, investors are now looking on FedEx to emerge as the victor in the parcel sector, Bloomberg reported.

The company also reports earnings on Wednesday after market close: here's what investors need to know.

Earnings By The Numbers: Wall Street expects FedEx to issue first-quarter earnings of $3.74 per share on revenues of $21.81 billion. Despite estimates pointing to a drop in sales, the company is expected to report an 8% year-over-year rise in adjusted EPS.

Investors should note shares of FedEx are up 42% year-to-date, while shares of UPS are down nearly 10% over the same time frame.

Share prices aside, what's truly intriguing for income-focused investors is the potential monthly income derived from FedEx's dividends.

Read also: Fed Decision Looms: Will Steady Rates Prevail Despite Inflation Pressures?

Dividends By The Numbers: Given FedEx’s current share price and dividend yield, here's a potential monthly earnings scenario:

To earn a monthly dividend income of $500, investors would need to buy about 1,188 shares of FedEx, which will run exactly $300,000. On a tighter budget? A $60,000 investment, or 238 shares, would generate a monthly dividend of $100.

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%. If the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).

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