How To Earn $500 A Month From Applied Materials Stock Ahead Of Q2 Earnings Report

Applied Materials, Inc. AMAT is expected to release earnings results for its second quarter, after the closing bell on Thursday.

Analysts expect the Santa Clara, California-based company to report quarterly earnings at $1.99 per share. That’s up from $1.78 per share in the year-ago period. Applied Materials is projected to post quarterly revenue of $6.54 billion, according to data from Benzinga Pro.

On Monday, Jefferies analyst Blayne Curtis downgraded Applied Materials from Buy to Hold. He also slashed the price target from $215 to $210.

With the recent buzz around Applied Materials, some investors may be eyeing potential gains from the company's dividends. As of now, Applied Materials has a dividend yield of 0.74%, which is a quarterly dividend amount of 40 cents a share ($1.60 a year).

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

Next, we take this amount and divide it by Applied Materials' $1.60 dividend: $6,000 / $1.60 = 3,750 shares

So, an investor would need to own approximately $815,588 worth of Applied Materials, or 3,750 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 / $1.60 = 750 shares, or $163,118 to generate a monthly dividend income of $100.

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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.

AMAT Price Action: Shares of Applied Materials rose 3.7% to close at $217.49 on Wednesday.

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Image: Courtesy of Applied Materials, Inc.