How To Earn $500 A Month From UPS Following Acquisition News

United Parcel Service Inc UPS, last week, penned a deal to acquire MNX Global Logistics (MNX) for an undisclosed amount.

Post-completion, the acquisition is expected to bring more precision and capability to UPS customers in the healthcare and related industries.

With the buzz around UPS following quarterly results, some investors may be eyeing potential gains from the company’s dividends. As of now, UPS offers an annual dividend yield of 4.16%, which is a quarterly dividend amount of $1.62 a share ($6.48 a year).

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 $144,336 or around 926 shares. For a more modest $100 per month or $1,200 per year, you would need $28,836 or around 185 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend (6.48 in this case). So, $6,000 / 6.48= 926 ($500 per month), and $1,200 / 6.48= 185 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.

UPS Price Action: Shares of United Parcel Service rose 0.2% to close at $155.87 on Friday.

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