How To Earn $500 A Month From Apple Stock Following Tuesday's Slide

Apple Inc. AAPL shares settled lower on Tuesday, Jan. 2, after Barclays downgraded its rating on the stock.

Barclays analyst Tim Long downgraded the stock from Equal-Weight to Underweight and lowered the price target from $161 to $160.

The analyst slightly lowered his AAPL estimates following another round of checks. He still picks up weakness in iPhone volumes and mix and a lack of bounce-back in Macs, iPads, and wearables.

Apple is now reportedly expected to launch its futuristic $3,500 Vision Pro headset in the last week of January, accelerating the launch timeline from February.

With the recent buzz around Apple, some investors may be eyeing potential gains from the company’s dividends too. As of now, the Cupertino, California-based company offers an annual dividend yield of 0.52%, which is a quarterly dividend amount of 24 cents per share (96 cents 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 $1,160,250 or around 6,250 shares. For a more modest $100 per month or $1,200 per year, you would need $232,050 or around 1,250 shares.

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To Calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.68 in this case). So, $6,000 / $0.96 = 6,250 ($500 per month), and $1,200 / $0.96 = 1,250 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.

AAPL Price Action: Shares of Apple fell 3.6% to close at $185.64 on Tuesday.

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