How To Earn $500 A Month From US Bancorp Stock Ahead Of Q4 Earnings

by Avi Kapoor Benzinga Staff Writer

Zinger Key Points

A more conservative goal of $100 monthly dividend income would require owning 600 shares of U.S. Bancorp.
An investor would need to own $147,180 worth of U.S. Bancorp to generate a monthly dividend income of $500.
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U.S. Bancorp USB will release its fourth-quarter financial results before the opening bell on Thursday, Jan. 16.

Analysts expect the Minneapolis, Minnesota-based company to report quarterly earnings at $1.05 per share, up from 49 cents per share in the year-ago period. U.S. Bancorp projects quarterly revenue of $6.99 billion, compared to $6.73 billion a year earlier, according to data from Benzinga Pro.

On Oct. 16, the company reported third-quarter adjusted earnings per share of $1.03, beating the analyst consensus estimate of 99 cents.

With the recent buzz around U.S. Bancorp, some investors may be eyeing potential gains from the company's dividends. As of now, U.S. Bancorp offers an annual dividend yield of 4.08%, which is a quarterly dividend amount of 50 cents per share ($2.00 a year).

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

Next, we take this amount and divide it by U.S. Bancorp's $2.00 dividend: $6,000 / $2.00 = 3,000 shares.

So, an investor would need to own approximately $147,180 worth of U.S. Bancorp, or 3,000 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 / $2.00 = 600 shares, or $29,436 to generate a monthly dividend income of $100.

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.

USB Price Action: Shares of U.S. Bancorp gained by 1.4% to close at $49.06 on Tuesday.