How To Earn $500 Monthly From Devon Energy Stock

Shares of Devon Energy Corp DVN saw an uptick Tuesday, boosted by Goldman Sachs Group‘s upgrade from Neutral to Buy; here's what investors need to know.

Goldman analyst Neil Mehta upgraded Devon Energy to a Buy and maintained the $58 price target.

The upgrade came despite the company’s recent underperformance following its third-quarter results. The dip was primarily due to higher capex and lower production, but Mehta saw it as a buying opportunity given the relative underperformance and the potential for lower raw material costs going forward.

With the potential 14% capital gains if an investor bought shares now and Goldman's price target of $58 is hit, the company offers an attractive dividend yield currently sitting at 8.87%.

Its hefty yield makes Devon an interesting prospect for investors looking to long an energy stock for a steady income stream.

Read Also: How To Earn $500 Monthly From Exxon Mobil

So, how much Devon Energy an investor would need to own to yield a monthly dividend income of $500?

To determine how much Devon Energy an investor needs to own to yield $500 per month, we can start by calculating the annual dividend income required: $500 x 12 months = $6,000.

Next, we take this amount and divide it by Devon Energy’s dividend yield of 8.87%: $6,000 / 0.0887 = $68,965.51.

This means that an investor would need to own approximately $68,965.51, or 1,358 shares of Devon Energy to generate a monthly dividend income of $500.

For those investors seeking a more modest goal, say a monthly income of $100, we calculate in a similar manner:

$100 x 12 months equals $1,200.

Dividing $1,200 by the 8.87% dividend yield results in $13,528.74.

This means that an investor would need to own approximately $13,528.74, or 267 shares of the energy company 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.

Read Next: Surprise Dip In May Inflation Raises Hopes For Pause In Fed Rate Hikes