Zinger Key Points
- A more conservative goal of $100 monthly dividend income would require 750 shares of Salesforce.
- An investor would need to own $1,144,388 worth of Salesforce to generate a monthly dividend income of $500.
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Analysts expect the company to report quarterly earnings at $2.61 per share, up from $2.29 per share in the year-ago period. Salesforce projects quarterly revenue of $10.04 billion, compared to $9.29 billion a year earlier, according to data from Benzinga Pro.
On Tuesday, Citigroup analyst Tyler Radke maintained Salesforce with a Neutral rating and lowered the price target from $390 to $350.
With the recent buzz around Salesforce, some investors may be eyeing potential gains from the company's dividends too. As of now, Salesforce offers an annual dividend yield of 0.52%, which is a quarterly dividend amount of 40 cents per share ($1.60 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 $1,147,050 or around 3,750 shares. For a more modest $100 per month or $1,200 per year, you would need $229,410 or around 750 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.60 in this case). So, $6,000 / $1.60 = 3,750 ($500 per month), and $1,200 / $1.60 = 750 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.
CRM Price Action: Shares of Salesforce fell 0.8% to close at $305.88 on Tuesday.
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