How To Earn $500 A Month From Home Depot Stock Ahead Of Q1 Earnings

Home Depot, Inc. HD will release its first-quarter earnings results before the opening bell on Tuesday, May 20.

Analysts expect the Atlanta, Georgia-based company to report quarterly earnings at $3.59 per share. That’s down from $3.63 per share in the year-ago period. According to data from Benzinga Pro, Home Depot projects to report quarterly revenue at $39.14 billion, compared to $36.42 billion a year earlier.

On May 8, Wells Fargo analyst Zachary Fadem maintained Home Depot with an Overweight rating and lowered the price target from $445 to $420.

With the recent buzz around Home Depot, some investors may be eyeing potential gains from the company's dividends. Currently, Home Depot offers an annual dividend yield of 2.43%. Its quarterly dividend is $2.30 per share ($9.20 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 $246,676 or around 652 shares. For a more modest $100 per month or $1,200 per year, you would need $49,222 or around 130 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($9.20 in this case). So, $6,000 / $9.20 = 652 ($500 per month), and $1,200 / $9.20 = 130 shares ($100 per month).

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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 gained 1.6% to close at $378.63 on Thursday.

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