How To Earn $500 A Month From Applied Materials Stock Ahead Of Q1 Earnings Report

Applied Materials, Inc. AMAT is expected to release earnings results for its first quarter (Q1), after the closing bell on Feb. 15, 2024.

Analysts expect the Santa Clara, California-based company to report quarterly earnings at $1.91 per share, versus year-ago earnings of $2.03 per share. Applied Materials is projected to post revenue of $6.48 billion, according to data from Benzinga Pro.

Cantor Fitzgerald analyst C J Muse recently reiterated Applied Materials with a Neutral and maintained a $180 price target, while B. Riley Securities analyst Craig Ellis maintained the stock with a Buy rating and raised the price target from $175 to $220.

During November, Applied Materials said Q4 revenue came in flat year-over-year at $6.72 billion, which beat the consensus estimate of $6.52 billion.

With the recent buzz around Applied Materials, some investors may be eyeing potential gains from the company’s dividends too. As of now, Applied Materials offers an annual dividend yield of 0.69%, which is a quarterly dividend amount of 32 cents per share ($1.28 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 $872,859 or around 4,688 shares. For a more modest $100 per month or $1,200 per year, you would need $174,646 or around 938 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.28 in this case). So, $6,000 / $1.28 = 4,688 ($500 per month), and $1,200 / $1.28 = 938 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.

AMAT Price Action: Shares of Applied Materials rose 3.3% to close at $186.19 on Wednesday.

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Image: Courtesy of Applied Materials