Zinger Key Points
- A more conservative goal of $100 monthly dividend income would require owning 361 shares of Microsoft.
- An investor would need to own $712,030 worth of Microsoft to generate a monthly dividend income of $500.
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Analysts expect the Redmond, Washington-based company to report quarterly earnings at $3.22 per share. That’s up from $2.94 per share last year. Microsoft projects quarterly revenue of $68.44 billion, compared to $61.86 billion a year earlier, according to data from Benzinga Pro.
The company has beaten analyst revenue estimates in eight straight quarters and nine of the last 10 quarters overall.
With the recent buzz around Microsoft, some investors may be eyeing potential gains from the company's dividends too. As of now, Microsoft offers an annual dividend yield of 0.84%. A quarterly dividend amount of 83 cents per share amounts to $3.32 a year.
To figure out how to earn $500 monthly from Microsoft, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Microsoft's $3.32 dividend: $6,000 / $3.32 = 1,807 shares.
So, an investor would need to own approximately $712,030 worth of Microsoft, or 1,807 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 / $3.32 = 361 shares, or $142,248 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.
MSFT Price Action: Shares of Microsoft gained by 0.7% to close at $394.04 on Tuesday.
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