Benzinga - by Avi Kapoor, Benzinga Staff Writer.
With the recent buzz around eBay Inc. (NASDAQ: EBAY) and the release of its upcoming earnings report, some investors may be eyeing potential gains from the company’s dividends.
The San Jose, California-based company currently has a dividend yield of 2.28%, which is a quarterly dividend amount of 25 cents a share ($1.00 a year).
To figure out how to earn $500 monthly from eBay dividends, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by eBay’s $1.00 dividend: $6,000 / $1.00 = 6,000 shares.
So, an investor would need to own approximately $263,280 worth of eBay, or 6,000 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 / $1.00 = 1,200 shares, or $52,656 to generate a monthly dividend income of $100.
Also Read: Cramer Predicts 'Another Great Year' For Live Nation; For EQT He's 'Not Going To Go There'
Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
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.
EBAY Price Action: Shares of eBay fell 0.3% to close at $43.88 on Monday. Analysts expect eBay to report quarterly earnings at $1.03 per share, down from year-ago earnings of $1.07 per share, when it releases a report after the closing bell on Feb. 27, 2024.
The company is projected to post revenue of $2.51 billion for the latest quarter, compared to $2.51 billion in the year-earlier quarter, according to data from Benzinga Pro.
Read More: This Jeff Bezos-backed platform has made real estate investing as easy as ordering stuff on Amazon. Read how you can invest as little as $100 in its offerings
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.