How To Earn $500 A Month From Sunoco Stock

Sunoco LP SUN shares closed slightly higher during Friday's session.

On Sept. 4, JP Morgan analyst Jeremy Tonet maintained Sunoco with an Overweight rating and raised the price target from $61 to $63.

Sunoco, on Aug. 7, reported quarterly earnings of $3.85 per share which beat the analyst consensus estimate of $1.30 per share. The company reported quarterly sales of $6.174 billion which beat the analyst consensus estimate of $5.822 billion, according to data from Benzinga Pro.

With the recent buzz around Sunoco, some investors may be eyeing potential gains from the company's dividends. As of now, Sunoco has a dividend yield of 6.55%. That’s a quarterly dividend amount of 87.56 cents a share ($3.502 a year).

To figure out how to earn $500 monthly from Sunoco, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by Sunoco's $3.502 dividend: $6,000 / $3.502 = 1,713 shares

So, an investor would need to own approximately $91,646 worth of Sunoco, or 1,713 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $3.502 = 343 shares, or $18,351 to generate a monthly dividend income of $100.

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.

SUN Price Action: Shares of Sunoco rose 0.4% to close at $53.50 on Friday.

Read More:

• Jim Cramer: ‘Hold On’ To Builders FirstSource, ‘Here’s The Problem’ With Viking Therapeutics

Image: Shutterstock