How To Earn $500 A Month From American Eagle Stock After Better-Than-Expected Earnings

American Eagle Outfitters, Inc. AEO reported better-than-expected earnings for its second quarter and raised its FY2024 operating income guidance.

American Eagle posted quarterly earnings of 25 cents per share, beating market estimates of 16 cents per share. The company’s quarterly sales came in at $1.20 billion versus expectations of $1.20 billion.

With the buzz around American Eagle following upbeat quarterly earnings, some investors may be eyeing potential gains from the company’s dividends, too. As of now, American Eagle offers an annual dividend yield of 2.30%, which is a quarterly dividend amount of $0.10 a share ($0.40 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 $258,000 or around 15,000 shares. For a more modest $100 per month or $1,200 per year, you would need $51,600 or around 3,000 shares.

Also Read: How To Earn $500 A Month From Brady Stock Following Q4 Earnings

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend (0.40 in this case). So, $6,000 / 0.40= 15,000 shares ($500 per month), and $1,200 / 0.40= 3,000 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.

Now Read: How To Earn $500 A Month From Ford Stock As Car Prices Skyrocket

AEO Price Action: Shares of American Eagle gained 0.2% to close at $17.20 on Wednesday.

Photo: Shutterstock