How To Earn $500 A Month From IBM Stock Ahead Of Q3 Earnings

International Business Machines Corporation IBM will release earnings results for its third quarter, after the closing bell on Wednesday.

Analysts expect the Armonk, New York-based company to report quarterly earnings at $2.23 per share, up from $2.01 per share in the year-ago period. IBM is expected to report revenue of $15.07 billion for the recent quarter, compared to $13.42 billion a year earlier, according to data from Benzinga Pro.

IBM recently showcased its latest advancement in artificial intelligence with the release of Granite 3.0, the company's most sophisticated family of AI models. The announcement was made during IBM's annual TechXchange event

With the recent buzz around IBM, some investors may be eyeing potential gains from the company's dividends too. As of now, IBM offers an annual dividend yield of 2.88%, which is a quarterly dividend amount of $1.67 per share ($6.68 a year).

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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 $208,561 or around 898 shares. For a more modest $100 per month or $1,200 per year, you would need $41,805 or around 180 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($6.68 in this case). So, $6,000 / $6.68 = 898 ($500 per month), and $1,200 / $6.68 = 180 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.

IBM Price Action: Shares of IBM gained 0.2% to close at $232.25 on Tuesday.

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