How To Earn $500 A Month From Qualcomm Stock

by Avi Kapoor Benzinga Staff Writer

Zinger Key Points

A more conservative goal of $100 monthly dividend income would require 353 shares of Qualcomm.
An investor would need to own $269,851 worth of Qualcomm to generate a monthly dividend income of $500.
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Qualcomm Incorporated QCOM shares settled higher during Friday's session.

Qualcomm bagged a key win in its legal battle against semiconductor design company Arm Holdings plc ARM. A federal jury in Delaware ruled that Qualcomm did not violate its licensing agreement with Arm, clearing a hurdle for the San Diego, California headquartered chipmaker.

With the recent buzz around Qualcomm, some investors may be eyeing potential gains from the company's dividends, too. As of now, Qualcomm offers an annual dividend yield of 2.22%, which is a quarterly dividend amount of 85 cents per share ($3.40 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 $269,851 or around 1,765 shares. For a more modest $100 per month or $1,200 per year, you would need $53,970 or around 353 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($3.40 in this case). So, $6,000 / $3.40 = 1,765 ($500 per month), and $1,200 / $3.40 = 353 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.

QCOM Price Action: Shares of Qualcomm gained 1.7% to close at $152.89 on Friday. The company’s stock gained another 1.9% in after-hours trading.