How To Earn $500 A Month From Target Stock After Downbeat Q1 Earnings

Target Corp TGT reported weaker-than-expected first-quarter earnings on Wednesday.

The Minneapolis-based company reported a first-quarter FY24 sales decline of 3.1% year-on-year to $24.531 billion, beating the analyst consensus estimate of $24.521 billion. Comparable sales declined 3.7% in the first quarter. Adjusted EPS of $2.03 missed the analyst consensus estimate of $2.06, according to data from Benzinga Pro.

Several analysts, including, Deutsche Bank, RBC Capital, UBS, BMO Capital, Truist Securities, Morgan Stanley and Morgan Stanley, lowered their price targets on the stock Thursday.

With the recent buzz around Target, some investors may be eyeing potential gains from the company's dividends. As of now, Target has a dividend yield of 3.05%, which is a quarterly dividend amount of $1.10 a share ($4.40 a year).

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

Next, we take this amount and divide it by Target's $4.40 dividend: $6,000 / $4.40  = 1,364 shares

So, an investor would need to own approximately $196,975 worth of Target, or 1,364 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 / $4.40 = 273 shares, or $39,424 to generate a monthly dividend income of $100.

Also Read: Top 5 Tech Stocks That Could Lead To Your Biggest Gains This Month

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.

TGT Price Action: Shares of Target gained 0.8% to close at $144.41 on Wednesday.

Read More: $1.5M Bet On This Healthcare Stock? Check Out These 4 Penny Stocks Insiders Are Aggressively Buying

Image: Shutterstock