How To Earn $500 A Month From Microsoft Stock Following Earnings Beat

Microsoft Corporation MSFT on Tuesday posted stronger-than-expected results for its fiscal first quarter.

Microsoft’s fiscal first-quarter revenue rose 13% year-over-year to $56.5 billion, which beat the consensus estimate of $51.4 billion. The company reported quarterly earnings of $2.99 per share, versus expectations of $2.50 per share.

With the buzz around Microsoft following upbeat earnings, some investors may be eyeing potential gains from the company’s dividends too. As of now, Microsoft offers an annual dividend yield of 0.88%, which is a quarterly dividend amount of 75 cents per share ($3.00 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 $681,340 or around 2,000 shares. For a more modest $100 per month or $1,200 per year, you would need $136,268 or around 400 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($3 in this case). So, $6,000 / 3 = 2,000 ($500 per month), and $1,200 / 3 = 400 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.

MSFT Price Action: Shares of Microsoft gained 3.1% to close at $340.67 on Wednesday.

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