How To Earn $500 A Month From Constellation Brands Stock Ahead Of Q1 Earnings Report

by Avi Kapoor Benzinga Staff Writer

Zinger Key Points

A more conservative goal of $100 monthly dividend income would require owning 297 shares of Constellation.
An investor would need to own $382,061 worth of Constellation to generate a monthly dividend income of $500.
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Constellation Brands, Inc. STZ will release earnings results for its first quarter, before the opening bell on Wednesday.

Analysts expect the Victor, New York-based company to report quarterly earnings at $3.46 per share, up from $2.91 per share in the year-ago period. Constellation is projected to post revenue of $2.68 billion for the quarter, according to data from Benzinga Pro.

On June 20, UBS analyst Peter Grom maintained Constellation with a Buy and lowered the price target from $320 to $315, while JPMorgan analyst Andrea Teixeira cut the price target from $296 to $291.

With the recent buzz around Constellation Brands, some investors may be eyeing potential gains from the company's dividends, too. As of now, Constellation Brands offers an annual dividend yield of 1.57%. That’s a quarterly dividend amount of $1.01 per share ($4.04 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 $382,061 or around 1,485 shares. For a more modest $100 per month or $1,200 per year, you would need $76,412 or around 297 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.04 in this case). So, $6,000 / $4.04 = 1,485 ($500 per month), and $1,200 / $4.04 = 297 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.

STZ Price Action: Shares of Constellation Brands gained 0.5% to close at $257.28 on Friday.