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Dell Technologies Inc. (NYSE:DELL) will release earnings results for the second quarter, after the closing bell on Thursday, Aug. 28.
Analysts expect the Round Rock, Texas-based company to report quarterly earnings at $2.29 per share. That’s up from $1.89 per share in the year-ago period.
With the recent buzz around Dell, some investors may be eyeing potential gains from the company’s dividends. Currently, Dell offers an annual dividend yield of 1.58%, which is a quarterly dividend amount of 53 cents per share ($2.10 a year).
To earn $500 monthly from Dell, start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Dell’s $2.10 dividend: $6,000 / $2.10 = 2,857 shares.
So, an investor would need to own approximately $378,553 worth of Dell, or 2,857 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 / $2.10 = 571 shares, or $75,658 to generate a monthly dividend income of $100.
Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
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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.
DELL Price Action: Shares of Dell rose by 1.2% to close at $132.50 on Wednesday.
On Aug. 21, Morgan Stanley analyst Erik Woodring maintained Dell with an Overweight rating and raised the price target from $135 to $144.
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