How To Earn $500 A Month From Kroger After Upbeat Earnings, Opioid Settlement Agreement

The Kroger Co. KR reported better-than-expected quarterly earnings and also settled an opioid lawsuit, agreeing to pay up to $1.2 billion to states and subdivisions and $36 million to tribes.

Kroger reported a second-quarter FY23 sales decline of 2.3% year-on-year to $33.85 billion, missing the analyst consensus of $34.13 billion. Adjusted EPS of $0.96 beat the consensus estimate of $0.91.

Kroger sees FY23 adjusted EPS of $4.45 - $4.60 versus an estimate of $4.51.

With the buzz around Kroger, some investors may be eyeing potential gains from the company’s dividends, too. As of now, Kroger offers an annual dividend yield of 2.55%, which is a quarterly dividend amount of $0.29 a share ($1.16 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 $242,773 or around 5,172 shares. For a more modest $100 per month or $1,200 per year, you would need $48,536 or around 1,034 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend (1.16 in this case). So, $6,000 / 1.16= 5,172 shares ($500 per month), and $1,200 / 1.16= 1,034 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.

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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.

KR Price Action: Shares of Kroger gained 3.1% to close at $46.94 on Friday.

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