Constellation Brands, Inc. (NYSE:STZ) will release earnings results for the second quarter, after the closing bell on Monday, Oct. 6.
Analysts expect the company to report quarterly earnings at $3.41 per share, down from $4.32 per share in the year-ago period. Constellation projects quarterly revenue of $2.48 billion, compared to $2.92 billion a year earlier, according to data from Benzinga Pro.
On Sept. 25, Wells Fargo analyst Chris Carey maintained Constellation Brands with an Overweight rating and cut the price target from $170 to $155.
With the recent buzz around Constellation, some investors may be eyeing potential gains from the company's dividends too. As of now, Constellation offers an annual dividend yield of 3.03%, which is a semi-annual dividend amount of $1.02 per share ($4.08 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 $198,100 or around 1,471 shares. For a more modest $100 per month or $1,200 per year, you would need $39,593 or around 294 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.08 in this case). So, $6,000 / $4.08 = 1,471 ($500 per month), and $1,200 / $4.08 = 294 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.
STZ Price Action: Shares of Constellation fell 1.3% to close at $134.67 on Tuesday.
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