How To Earn $500 A Month From Home Depot Stock Ahead Of Q2 Earnings Report

by Avi Kapoor Benzinga Staff Writer

Zinger Key Points

A more conservative goal of $100 monthly dividend income would require owning 133 shares of Home Depot.
An investor would need to own $232,343 worth of Home Depot to generate a monthly dividend income of $500.
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The Home Depot, Inc. HD is set to release earnings results for its second quarter, before the opening bell on Tuesday, Aug. 13.

Analysts expect the Atlanta, Georgia-based company to report quarterly earnings at $4.50 per share, down from $4.65 per share in the year-ago period. Home Depot is expected to report quarterly revenue of $43.37 billion for the quarter, according to data from Benzinga Pro.

On Aug. 7, Telsey Advisory Group analyst Joseph Feldman maintained Home Depot with a Market Perform and maintained the price target of $360.

With the recent buzz around Home Depot, some investors may be eyeing potential gains from the company's dividends too. As of now, Home Depot offers an annual dividend yield of 2.59%, which is a quarterly dividend amount of $2.25 per share ($9.00 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 $232,343 or around 667 shares. For a more modest $100 per month or $1,200 per year, you would need $46,329 or around 133 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($9.00 in this case). So, $6,000 / $9.00 = 667 ($500 per month), and $1,200 / $9.00 = 133 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.

HD Price Action: Shares of Home Depot rose 1.7% to close at $348.34 on Thursday.