How To Earn $500 A Month From Starbucks Stock Ahead Of Q1 Earnings

Starbucks Corporation SBUX is expected to release earnings results for its first quarter, after the closing bell on Jan. 30, 2024.

Analysts expect the company to report quarterly earnings at 93 cents per share, up from 75 cents per share in the year-ago period. The company is projected to post revenue of $9.61 billion, according to data from Benzinga Pro.

Starbucks plans to operate 1,000 stores in India by 2028, or one new store opening every three days, doubling employment. The strategy, which JV Tata Starbucks Private Limited will manifest, focuses on training local partners for jobs and promoting Indian-origin coffee to Starbucks customers worldwide.

With the recent buzz around Starbucks, some investors may be eyeing potential gains from the company’s dividends too. As of now, Starbucks offers an annual dividend yield of 2.43%, which is a quarterly dividend amount of 57 cents per share ($2.28 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 $246,882 or around 2,632 shares. For a more modest $100 per month or $1,200 per year, you would need $49,339 or around 526 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.28 in this case). So, $6,000 / $2.28 = 2,632 ($500 per month), and $1,200 / $2.28 = 526 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.

SBUX Price Action: Shares of Starbucks gained 1.1% to close at $93.80 on Monday.

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