How To Earn $500 A Month From Kroger Stock After Last Week's Upbeat Earnings Report

Kroger Company KR reported better-than-expected earnings for its third quarter on Thursday, Nov. 30, 2023.

The company posted a third-quarter FY23 sales decline of 0.7% year-on-year to $33.96 billion, marginally beating the analyst consensus estimate of $33.92 billion. Adjusted EPS of 95 cents beat the consensus estimate of 91 cents.

With the recent buzz around Kroger, some investors may be eyeing potential gains from the company’s dividends. As of now, Kroger offers an annual dividend yield of 2.60%, which is a quarterly dividend amount of 29 cents per share ($1.16 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 $231,033 or around 5,172 shares. For a more modest $100 per month or $1,200 per year, you would need $46,189 or around 1,034 shares.

Read This: Over $2M Bet On This Industrial Stock? Check Out These 4 Penny Stocks Insiders Are Aggressively Buying

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.16 in this case). So, $6,000 / $1.16 = 5,172 ($500 per month), and $1,200 / $1.16 = 1,034 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.

KR Price Action: Shares of Kroger rose 0.2% to close at $44.67 on Monday.

Read More: Investing in real estate just got a whole lot simpler. This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.

Photo: Shutterstock