How To Earn $500 Monthly From Exxon Mobil

Goldman Sachs Group cut its oil price forecast for the third time in six months, a tangible concern for oil investors. Brent crude fell 2.5% Monday to hover around $72 a barrel, while WTI crude slipped more than 3% to $68 per barrel.

Despite Goldman's forecast, bullish signs are on the horizon. Hedge funds are increasing bets on both Brent and WTI, according to Bloomberg. Also, the Fed is expected to hold back on a year’s worth of interest rate hikes, which is likely to stimulate energy demand.

With crude slipping to psychological levels, shares of Exxon Mobil Corp XOM opened 1.21% lower, falling from its all-time highs. While the stock is rebounding now, the drawdown offers investors upside opportunity for equity and dividend gains.

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With that in mind, how much Exxon Mobil would an investor need to yield $500 per month in dividends?

To determine how much Exxon an investor needs to own to yield $500 per month, we can start by calculating the annual dividend income required: $500 x 12 months = $6,000.

Next, divide the amount by Exxon’s dividend yield, which is currently 3.42%: $6,000 / 0.0342 = $175,438.59.

This means an investor would need to own approximately $175,438.59 worth of Exxon Mobil stock, or 1,646 shares, to generate a monthly dividend income of $500.

If that's too much for your appetite, let's shoot for a more conservative amount, say $100 per month.

We would calculate this the same way: $100 x 12 months = $1,200.

$1,200 / 0.0342 = $35,087.71.

This means an investor looking to yield $100 from Exxon Mobil would need to own $35,087.71, or 330 shares, 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.

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