Zinger Key Points
- A more conservative goal of $100 monthly dividend income would require owning 261 shares of JPMorgan.
- An investor would need to own $270,971 worth of JPMorgan to generate a monthly dividend income of $500.
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JPMorgan Chase & Co. JPM will release its second-quarter financial results, before the opening bell on Friday, July 12.
Analysts expect the New York-based company to report quarterly earnings at $4.15 per share, down from $4.75 per share in the year-ago period. JPMorgan expects revenue of $42.03 billion, compared to $42.4 billion a year earlier, according to data from Benzinga Pro.
On July 9, Keefe, Bruyette & Woods analyst David Konrad maintained JPMorgan Chase with a Market Perform rating, while increasing the price target from $209 to $211.
With the recent buzz around JPMorgan, some investors may be eyeing potential gains from the company's dividends too. As of now, JPMorgan offers an annual dividend yield of 2.21%. That’s a quarterly dividend amount of $1.15 per share ($4.60 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 $270,971 or around 1,304 shares. For a more modest $100 per month or $1,200 per year, you would need $54,236 or around 261 shares.
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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.60 in this case). So, $6,000 / $4.60 = 1,304 ($500 per month), and $1,200 / $4.60 = 261 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.
JPM Price Action: Shares of JPMorgan rose 0.1% to close at $207.80 on Wednesday.
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