How To Earn $500 A Month From Principal Financial Group Stock Ahead Of Q4 Print

Principal Financial Group, Inc. PFG is expected to release earnings results for its fourth quarter, after the closing bell on Feb. 12.

Analysts expect the Des Moines, Iowa-based company to report quarterly earnings at $1.68 per share, versus year-ago earnings of $1.7 per share. The company is projected to post revenue of $3.60 billion, compared to $3.62 billion in the year-earlier quarter, according to data from Benzinga Pro.

Last month, Evercore ISI Group analyst Thomas Gallagher upgraded Principal Finl from Underperform to In-Line and raised the price target from $82 to $83.

The company, during October, reported non-GAAP operating earnings of $1.72 per share for the third quarter, up from $1.60 per share in the year-ago quarter.

With the recent buzz around Principal Financial, some investors may be eyeing potential gains from the company’s dividends, too. As of now, Principal Financial offers an annual dividend yield of 3.45%, which is a quarterly dividend amount of 67 cents per share ($2.68 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 $174,105 or around 2,239 shares. For a more modest $100 per month or $1,200 per year, you would need $34,836 or around 448 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.68 in this case). So, $6,000 / $2.68 = 2,239 ($500 per month), and $1,200 / $2.68 = 448 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.

PFG Price Action: Shares of Principal Financial fell 0.5% to close at $77.76 on Thursday.

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