How To Earn $500 A Month From Starbucks Stock Ahead Of Q2 Earnings

Starbucks Corporation (NASDAQ:SBUX) will release earnings results for the second quarter, after the closing bell on Tuesday, April 29.

Analysts expect the Seattle-based company to report quarterly earnings at 48 cents per share. That’s down from 68 cents per share in the year-ago period. Starbucks projects to report quarterly revenue at $8.83 billion, compared to $8.56 billion a year earlier.

On Monday, UBS analyst Dennis Geiger maintained Starbucks with a Neutral rating and lowered the price target from $105 to $90.

With the recent buzz around Starbucks, some investors may be eyeing potential gains from the company’s dividends. Currently, Starbucks offers an annual dividend yield of 2.91% — a quarterly dividend of 61 cents per share ($2.44 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 $206,310 or around 2,459 shares. For a more modest $100 per month or $1,200 per year, you would need $41,279 or around 492 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.44 in this case). So, $6,000 / $2.44 = 2,459 ($500 per month), and $1,200 / $2.44 = 492 shares ($100 per month).

View more earnings on SBUX

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.

SBUX Price Action: Shares of Starbucks gained 0.1% to close at $83.90 on Monday.

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