How To Earn $500 A Month From First Financial Bancorp Stock

A Piper Sandler analyst note on Monday sent shares of First Financial Bancorp FFBC nearly 5% higher with an upgrade on the stock.

Analyst Brandan Nosal upgraded FFBC from Neutral to Overweight and raised its price target from $23 to $24.

The revision comes on the back of the bank’s strong performance in the recent rate cycle, its substantial presence in Cincinnati and other major Midwest cities, and its history of robust returns across different rate environments. Read more on Nosal’s upgrade.

With shares trading around the $21.50 level at the time of writing, an investor can capture the capital appreciation on shares if the stock hits Nosal's price target — but we're here its 4.28% dividend yield.

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So how can an investor leverage FFBC’s dividends to pocket a steady $500 each month?

First, as a bank with $17 billion in assets, spanning across Ohio, Indiana, northern Kentucky, and northeast Illinois. FFBC also has a solid funding base and an asset-sensitive balance sheet.

Assuming its 4.28% dividend yield, to earn $500 per month or $6,000 per year solely from dividends, an investor would need about $140,186.91 or 6,526 shares of FFBC. For a more modest $100 per month or $1,200 per year, you'd need to invest around $28,037, or 1,307 shares.

To Calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend yield (0.0428 in this case). So, $6,000 / 0.0428 = $140,186.91 ($500 per month), and $1,200 / 0.0428 = $28,037 ($100 per month).

How That Works: We find the dividend yield 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.

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