How To Earn $500 A Month From AT&T Stock After Strong Earnings Report

AT&T Inc T on Thursday reported better-than-expected third-quarter financial results.

AT&T reported third-quarter FY23 operating revenues of $30.35 billion, up 1% year-over-year, beating the consensus of $28.69 billion. Adjusted EPS of $0.64 beat the consensus of $0.59.

AT&T said it now expects full-year adjusted EBITDA growth of better than 4% versus prior guidance of 3%+.

With the buzz around AT&T following upbeat earnings, some investors may be eyeing potential gains from the company’s dividends too. As of now, AT&T offers an annual dividend yield of 7.27%, which is a quarterly dividend amount of $0.2775 per share ($1.11 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 $82,480 or around 5,405 shares. For a more modest $100 per month or $1,200 per year, you would need $16,496 or around 1,081 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend (1.11 in this case). So, $6,000 / 1.11= 5,405 ($500 per month), and $1,200 / 1.11= 1,081 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.

T Price Action: Shares of AT&T gained 6.6% to close at $15.26 on Thursday.

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