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

PepsiCo, Inc. PEP will release its second-quarter financial results, before the opening bell on Thursday, July 11.

Analysts expect the Purchase, New York-based company to report quarterly earnings at $2.17 per share, up from $2.09 per share in the year-ago period. PepsiCo is expected to post revenue of $22.69 billion, compared to $22.32 billion a year earlier, according to data from Benzinga Pro.

On Monday, BofA Securities analyst Bryan Spillane maintained PepsiCo with a Buy rating and cut the price target from $210 to $190.

With the recent buzz around PepsiCo, some investors may be eyeing potential gains from the company's dividends too. As of now, PepsiCo offers an annual dividend yield of 3.34%, which is a quarterly dividend amount of $1.355 per share ($5.42 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 $179,467 or around 1,107 shares. For a more modest $100 per month or $1,200 per year, you would need $35,829 or around 221 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($5.42 in this case). So, $6,000 / $5.42 = 1,107 ($500 per month), and $1,200 / $5.42 = 221 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.

PEP Price Action: Shares of PepsiCo fell 1.4% to close at $162.12 on Monday.

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