How To Earn $500 A Month From Alcoa Stock Ahead Of Q4 Earnings Report

Alcoa Corporation AA is expected to release earnings results for its fourth quarter after the closing bell on Jan. 17, 2024.

Analysts expect the company to report a quarterly loss of 78 cents per share on revenue of $2.66 billion, according to data from Benzinga Pro.

Alcoa plans to fully curtail production in 2024 at its Kwinana Alumina Refinery in Western Australia, with the process beginning in the second quarter.

With the recent buzz around Alcoa, some investors may be eyeing potential gains from the company’s dividends. As of now, Alcoa offers an annual dividend yield of 1.33%, which is a quarterly dividend amount of 10 cents per share (40 cents 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 $450,450 or around 15,000 shares. For a more modest $100 per month or $1,200 per year, you would need $90,090 or around 3,000 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.40 in this case). So, $6,000 / $0.40 = 15,000 ($500 per month), and $1,200 / $0.40 = 3,000 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.

AA Price Action: Shares of Alcoa fell 2.8% to close at $30.03 on Friday.

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