How To Earn $500 A Month From Costco Stock Following Upbeat Earnings Report

Costco Wholesale Corporation COST, last week, reported better-than-expected earnings for its first quarter and announced a special cash dividend of $15 per share.

Costco said first-quarter net sales increased 6.1% year-over-year. The company reported quarterly revenue of $57.8 billion, which beat the consensus estimate of $57.72 billion. The retailer reported adjusted quarterly earnings of $3.48 per share, which beat analyst estimates of $3.42 per share, according to Benzinga Pro.

Several analysts, including, UBS, Citigroup, Stifel, Truist Securities, DA Davidson and BMO Capital, raised their price targets on the stock following the release of the earnings report.

With the recent buzz around Costco following upbeat earnings, some investors may be eyeing potential gains from the company’s dividends. As of now, Costco has a dividend yield of 0.60%, which is a quarterly dividend amount of $1.02 a share ($4.08 a year).

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

Next, we take this amount and divide it by Costco $4.08 dividend: $6,000 / $4.08 = 1,471 shares

So, an investor would need to own approximately $996,956 worth of Costco, or 1,471 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 / $4.08 = 294 shares, or $199,256 to generate a monthly dividend income of $100.

Also Read: Cisco Systems, Electronic Arts And 2 Other Stocks Insiders Are Selling

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.

COST Price Action: Shares of Costco fell 0.5% to close at $677.74 on Tuesday.

Read More: Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” Here are 3 high-yield investments to add significant income to your portfolio.

Photo: Shutterstock