Paychex, Inc. (NASDAQ: PAYX) will release earnings results for the first quarter before the opening bell on Tuesday, Sept. 30.
Analysts expect the company to report quarterly earnings at $1.20 per share, up from $1.16 per share in the year-ago period. Paychex projects quarterly revenue of $1.54 billion, compared to $1.32 billion in the same quarter a year earlier, according to data from Benzinga Pro.
On September 22, Stifel analyst David Grossman maintained a Hold rating on Paychex and lowered the price target from $152 to $142.
With the recent buzz around Paychex, some investors may also be eyeing potential gains from the company's dividends. As of now, Paychex offers an annual dividend yield of 3.37%, which is a semi-annual dividend amount of $1.08 per share ($4.32 a year).
So, how can investors exploit its dividend yield to earn a regular $500 monthly?
To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $178,084 or around 1,389 shares. For a more modest $100 per month or $1,200 per year, you would need $35,642 or around 278 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.32 in this case). So, $6,000 / $4.32 = 1,389 ($500 per month), and $1,200 / $4.32 = 278 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.
PAYX Price Action: Shares of Paychex rose 1.2% to close at $128.21 on Friday.
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