How To Earn $500 A Month From Charles Schwab Stock Following Q3 Earnings

The Charles Schwab Corporation SCHW on Monday reported better-than-expected earnings for the third quarter.

The company posted a quarterly net revenue decline of 16% year-over-year to $4.61 billion, missing the consensus of $4.63 billion. Adjusted EPS stood at $0.77, down 30% Y/Y, exceeding the consensus of $0.75.

With Charles Schwab reporting upbeat quarterly earnings, some investors may be eyeing potential gains from the company’s dividends. As of now, Charles Schwab has a dividend yield of 1.86%, which is a quarterly dividend amount of 25 cents a share ($1.00 a year).

To figure out how to earn $500 monthly from Charles Schwab dividends, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by Charles Schwab $1.00 dividend: $6,000 / $1.00 = 6,000 shares

So, an investor would need to own approximately $322,320 worth of Charles Schwab, or 6,000 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / 1.00 = 1,200 shares, or $64,464 to generate a monthly dividend income of $100.

Also Read: Top 3 Health Care Stocks That May Implode This Quarter

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.

SCHW Price Action: Shares of Charles Schwab gained 4.7% to close at $53.72 on Monday.

Check This Out: Rain Oncology And 3 Other Stocks Under $1 Insiders Are Buying

Photo: Shutterstock