How To Earn $500 A Month From Nvidia Stock Ahead Of Q4 Earnings Report

NVIDIA Corporation NVDA is set to release earnings results for its fourth quarter, after the closing bell on Feb. 21, 2024.

Analysts expect the company to report quarterly earnings at $4.64 per share, up sharply from year-ago earnings of 88 cents per share. The company is projected to post revenue of $20.62 billion for the latest quarter, compared to $6.05 billion in the year-earlier quarter, according to data from Benzinga Pro.

On Tuesday, Nvidia’s stock experienced a sharp decline of up to 6.7%, just a day before the company’s highly anticipated earnings report. This dip could be attributed to profit-taking ahead of the earnings release, according to the host of CNBC's "Mad Money, Jim Cramer. Despite this, the drop is seen as a potential entry point for investors who have not yet invested in Nvidia.

With the recent buzz around Nvidia, some investors may be eyeing potential gains from the company’s dividends. As of now, Nvidia has a dividend yield of 0.02%, which is a quarterly dividend amount of 4 cents a share (16 cents a year).

To figure out how to earn $500 monthly from Nvidia dividends, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by Nvidia’s $0.16 dividend: $6,000 / $0.16 = 37,500 shares

So, an investor would need to own approximately $26,044,500 worth of Nvidia, or 37,500 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $0.16 = 7,500 shares, or $5,208,900 to generate a monthly dividend income of $100.

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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.

NVDA Price Action: Shares of Nvidia fell 4.4% to close at $694.52 on Tuesday.

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