How To Earn $500 A Month From Lowe's Stock Ahead Of Q2 Earnings Report

Lowe’s Companies, Inc. LOW is set to release earnings results for its second quarter, before the opening bell on Tuesday, Aug. 20.

Analysts expect the Mooresville, North Carolina-based company to report quarterly earnings at $3.97 per share, down from $4.56 per share in the year-ago period. Lowe’s projects to report quarterly revenue of $23.91 billion for the quarter, according to data from Benzinga Pro.

With the recent buzz around Lowe’s, some investors may be eyeing potential gains from the company's dividends, too. Lowe’s currently offers an annual dividend yield of 1.91%. That’s a quarterly dividend amount of $1.15 per share ($4.60 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 $314,460 or around 1,304 shares. For a more modest $100 per month or $1,200 per year, you would need $62,940 or around 261 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.60 in this case). So, $6,000 / $4.60 = 1,304 ($500 per month), and $1,200 / $4.60 = 261 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.

LOW Price Action: Shares of Lowe’s rose 0.5% to close at $241.15 on Friday.

On Aug. 14, Telsey Advisory Group analyst Joseph Feldman maintained Lowe’s with a Market Perform rating and maintained a $230 price target.

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