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

Target Corporation (NYSE:TGT) will release its second-quarter earnings report before the opening bell on Wednesday, Aug. 19.

Analysts expect the company to report quarterly earnings of $2.30 per share, up from $2.05 per share in the year-ago period. The consensus estimate for Target’s quarterly revenue is $26.08 billion. It reported $25.21 billion last year, according to Benzinga Pro.

On Friday, Telsey Advisory Group analyst Joseph Feldman maintained Target with an Outperform rating and raised the price target from $150 to $170, while Jefferies analyst Corey Tarlowe maintained the stock with a Buy and boosted the price target from $161 to $177.

With the recent buzz around Target, some investors may be eyeing potential gains from the company’s dividends too. As of now, TGT has an annual dividend yield of 3.00%, which is a quarterly dividend amount of $1.16 per share ($4.64 a year).  

So, how can investors leverage its dividend yield to pocket a regular $500 per month?

To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $199,743 or around 1,293 shares. For a more modest $100 per month or $1,200 per year, you would need $40,010 or around 259 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.64 in this case). So, $6,000 / $4.64 = 1,293 ($500 per month), and $1,200 / $4.64 = 259 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.

TGT Price Action: Shares of Target fell 0.7% to close at $154.48 on Friday.

Image by Ken Wolter via Shutterstock