Benzinga - by Avi Kapoor, Benzinga Staff Writer.
Capital One Financial Corporation (NYSE: COF) is expected to release earnings results for its fourth quarter, after the closing bell on Thursday, Jan. 25.
Analysts expect the McLean, Virginia-based company to report quarterly earnings at $2.64 per share, down from $2.82 per share in the year-ago period, according to data from Benzinga Pro.
Capital One is projected to post revenue of $9.46 billion, compared to $9.04 billion in the year-earlier quarter.
On Jan. 10, BMO Capital analyst James Fotheringham downgraded Capital One Financial from Outperform to Market Perform, while Deutsche Bank analyst Meng Jiao initiated coverage on the stock with a Hold rating and announced a price target of $153.
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Some investors may be eyeing potential gains from Capital One’s dividends. The company currently offers an annual dividend yield of 1.83%, which is a quarterly dividend amount of 60 cents per share ($2.40 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 $327,725 or around 2,500 shares. For a more modest $100 per month or $1,200 per year, you would need $65,545 or around 500 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.40 in this case). So, $6,000 / $2.40 = 2,500 ($500 per month), and $1,200 / $2.40 = 500 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.
COF Price Action: Shares of Capital One Financial gained around 1% to close at $131.09 on Wednesday.
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