How To Earn $500 A Month From American Express Stock After Upbeat Earnings

American Express Co AXP on Friday reported better-than-expected earnings for the third quarter.

Revenue (net of interest expense) grew 12% year-on-year to $15.38 billion, beating the consensus of $15.36 billion. EPS of $3.30 beat the consensus of $2.94.

The company is on track to achieve revenue growth and EPS for the entire year, consistent with the annual guidance provided at the start of the year.

With American Express reporting upbeat quarterly earnings, some investors may be eyeing potential gains from the company’s dividends. As of now, American Express has a dividend yield of 1.70%, which is a quarterly dividend amount of 60 cents a share ($2.40 a year).

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

Next, we take this amount and divide it by American Express $2.40 dividend: $6,000 / $2.40 = 2,500 shares

So, an investor would need to own approximately $353,925 worth of American Express, or 2,500 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 / 2.40 = 500 shares, or $70,785 to generate a monthly dividend income of $100.

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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.

AXP Price Action: Shares of American Express fell 5.4% to close at $141.57 on Friday.

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