Zinger Key Points
- An investor would need to own $111,436 worth of ConAgra to generate a monthly dividend income of $500.
- A more conservative goal of $100 monthly dividend income would require owning 857 shares of ConAgra.
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ConAgra Brands Inc CAG reported better-than-expected earnings for its first quarter on Thursday.
The company posted quarterly sales of $2.90 billion, flat Y/Y, versus the consensus of $2.95 billion. Adjusted EPS increased 15.8% to $0.66, beating the consensus of $0.60.
ConAgra reaffirmed FY24 organic net sales growth of 1% and adjusted EPS of $2.70-$2.75 (consensus $2.72).
With the buzz around ConAgra following quarterly results, some investors may be eyeing potential gains from the company’s dividends. As of now, ConAgra offers an annual dividend yield of 5.38%, which is a quarterly dividend amount of 35 cents per share ($1.40 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 $111,436 or around 4,286 shares. For a more modest $100 per month or $1,200 per year, you would need $22,282 or around 857 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend (1.40 in this case). So, $6,000 / 1.40= 4,286 ($500 per month), and $1,200 / 1.40= 857 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.
CAG Price Action: Shares of ConAgra fell 2% to close at $26.00 on Thursday.
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