How To Earn $500 A Month From Micron Technology Stock

Boise, Idaho-based computer memory and data storage producer Micron Technology Inc MU saw a setback Friday as its shares fell more than 5% before slightly recovering.

The sell-off in shares was spurred by a warning from the tech company about a potentially larger-than-expected hit to its global revenue due to China’s ban on sales of its chips to key domestic industries.

China’s cyberspace regulator announced in May that Micron failed its network security review, and would be prohibiting operators of key infrastructure from purchasing the company’s products. Micron said about half of its revenue from China-based companies is now in jeopardy, translating to a low-double-digit percentage of its total revenue.

Despite the setback, some investors are taking advantage of the dip in Micron’s share price, as shares begin to pare earlier losses, with analysts’ price targets for the stock varying between $65 to $100.

Read Also: Micron Expands Geographic Reach, Eyeing Billion-Dollar Indian Semiconductor Venture

Yet beyond the possible equity upside, there’s another potential earning avenue to explore with Micron — dividends.

As of now, Micron offers a dividend yield of 0.68%, which could be an appealing prospect for income-focused investors.

How can an investor leverage this to earn $500 per month? Let’s break it down.

For an investor seeking to earn a monthly income of $500 from Micron dividends, we start with the annual target of $6,000 ($500 x 12 months). Next, we take this amount and divide it by Micron's dividend yield of 0.68%, which gives us the total investment required: $6,000 / 0.0068 = $882,352.94.

This means that to generate $500 per month in dividends, an investor would need to own approximately $882,352.94 worth of Micron Technology stock, or 13,427 shares.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / 0.0068 = $176,470. In this scenario, an investor would need to hold around 2,686 shares of Micron.

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.

Read next: How To Earn $500 A Month From Qualcomm Stock

Photo: Courtesy Micron