How To Earn $500 A Month From NetApp Stock Ahead Of Q3 Earnings

NetApp, Inc. NTAP will release its third-quarter financial results after the closing bell on Thursday, Feb. 27.

Analysts expect the San Jose, California-based company to report quarterly earnings at $1.91 per share. That’s down from $1.94 per share in the year-ago period. NetApp projects quarterly revenue of $1.7 billion, compared to $1.61 billion a year earlier, according to data from Benzinga Pro.

On Feb. 19, Bank of America Securities analyst Wamsi Mohan upgraded the rating for NetApp from Underperform to Neutral and raised the price target from $121 to $128.

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With the recent buzz around NetApp, some investors may be eyeing potential gains from the company's dividends too. As of now, NetApp offers an annual dividend yield of 1.70%, which is a quarterly dividend amount of 52 cents per share ($2.08 a year).

To figure out how to earn $500 monthly from NetApp, start with a yearly target of $6,000 ($500 x 12 months).

Next, we divide this amount by NetApp $2.08 dividend: $6,000 / $2.08 = 2,885 shares.

So, an investor would need to own approximately $359,154 worth of NetApp, or 2,885 shares, to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $2.08 = 577 shares, or $71,831 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis. The dividend payment and the stock price both fluctuate over time.

The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.

For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).

Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).

Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.

NTAP Price Action: Shares of NetApp gained by 1.5% to close at $124.49 on Wednesday.

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