How To Earn $500 A Month From CVS Health Stock Ahead Of Q3 Earnings

CVS Health Corporation (NYSE:CVS) investors may be eyeing potential gains from the company’s dividends ahead of its third-quarter earnings report on Wednesday, Nov. 4.

Currently, CVS has an annual dividend yield of 3.01%, with a quarterly dividend of 66.5 cents per share ($2.66 a year). To figure out how to earn $500 monthly from CVS, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we divide that amount by CVS Health’s $2.66 dividend: $6,000 / $2.66 = 2,256 shares.

So, an investor would need to own about $199,679 of CVS Health, or 2,256 shares, to generate $500 in monthly dividend income.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $2.66 = 451 shares, or $39,918 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis, as dividend payments and stock prices both fluctuate over time.

How is the Dividend Yield Calculated?

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.

Price Action

Shares of CVS Health fell 1.9% to close at $88.51 on Monday.

Analysts expect the company to report quarterly earnings of $1.65 per share, up from $1.60 per share a year ago. The consensus estimate for CVS Health’s quarterly revenue is $104.69 billion. It reported $102.87 billion last year, according to Benzinga Pro.

Leerink Partners analyst Michael Cherny, on Oct. 12, maintained CVS Health with an Outperform rating and lowered the price target from $119 to $112.

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