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

Target Corporation TGT reported better-than-expected third-quarter financial results on Wednesday.

Target reported a third-quarter (Q3) 2023 sales decline of 4.22% year-on-year to $25.398 billion, beating the analyst consensus estimate of $25.31 billion. Adjusted EPS of $2.10 beat the analyst consensus estimate of $1.48.

With the buzz around Target following upbeat quarterly earnings, some investors may be eyeing potential gains from the company’s dividends too. As of now, Target offers an annual dividend yield of 3.37%, which is a quarterly dividend amount of $1.10 per share ($4.40 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 $177,947 or around 1,364 shares. For a more modest $100 per month or $1,200 per year, you would need $35,616 or around 273 shares.

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Calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.40 in this case). So, $6,000 / $4.40 = 1,364 ($500 per month), and $1,200 / $4.40 = 273 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:

• If a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50).
• 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).

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.

TGT Price Action: Shares of Target jumped 17.8% to close at $130.46 on Wednesday.

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