How To Earn $500 A Month From Apple Stock

Apple Inc. AAPL shares closed higher during Wednesday's session on continued strength following the company’s WWDC event.

The Cupertino, California-based tech giant has surpassed Microsoft Corp MSFT in market capitalization, reclaiming its title as the world's largest company.

Days after it unveiled its consumer AI strategy, Apple has become the first brand to surpass $1 trillion in brand value, according to a global ranking by Kantar's BrandZ. This marks a 15% increase from the previous year. Earlier this week, Apple unveiled new AI features, expected to reignite demand for iPhones and reverse a sales decline.

B of A Securities analyst Wamsi Mohan maintained Apple with a Buy rating and maintained a $230 price target.

With the recent buzz around Apple, some investors may be eyeing potential gains from the company's dividends too. As of now, Apple offers an annual dividend yield of 0.47%, which is a quarterly dividend amount of 25 cents per share ($1.00 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 $1,278,420 or around 6,000 shares. For a more modest $100 per month or $1,200 per year, you would need $255,684 or around 1,200 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.00 in this case). So, $6,000 / $1.00 = 6,000 ($500 per month), and $1,200 / $1.00 = 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.

AAPL Price Action: Shares of Apple gained 2.9% to close at $213.07 on Wednesday.

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