How To Earn $500 A Month From eBay Stock After Upbeat Earnings

eBay Inc. EBAY posted upbeat earnings for its third quarter, after the closing bell on Tuesday.

The company reported adjusted earnings of $1.03 per share for the third quarter, topping the consensus estimate of 94 cents per share. Revenue of $2.50 billion was in line with the consensus of $2.50 billion.

The company said it sees fourth-quarter earnings of $1.00 to $1.05 per share on revenue of $2.47 billion to $2.53 billion. It expects FY23 earnings of $4.17 to $4.22 per share on revenue of $10.02 billion to $10.08 billion.

With the buzz around eBay following upbeat quarterly earnings, some investors may be eyeing potential gains from the company’s dividends too. As of now, eBay offers an annual dividend yield of 2.45%, which is a quarterly dividend amount of 25 cents per share ($1 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 $244,620 or around 6,000 shares. For a more modest $100 per month or $1,200 per year, you would need $48,924 or around 1,200 shares.

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

EBAY Price Action: Shares of eBay gained 1% to close at $40.77 on Tuesday.

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