Benzinga - by Avi Kapoor, Benzinga Staff Writer.
NVIDIA Corporation (NASDAQ: NVDA) shares closed lower on Monday after recording sharp gains in the recent period.
The company’s stock gained around 19% over the past month, adding 78% year-to-date. On March 7, Mizuho analyst Vijay Rakesh maintained NVIDIA with a Buy rating and raised the price target from $850 to $1,000.
NVIDIA was recently sued by three authors for allegedly using their copyrighted works without permission to train its AI platform. The lawsuit was filed on Friday in a San Francisco federal court by authors Brian Keene, Abdi Nazemian, and Stewart O’Nan, Reuters reported.
With the recent buzz around NVIDIA, some investors may be eyeing potential gains from the company’s dividends too. As of now, NVIDIA offers an annual dividend yield of 0.02%, which is a quarterly dividend amount of 4 cents per share (16 cents 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 $32,165,250 or around 37,500 shares. For a more modest $100 per month or $1,200 per year, you would need $6,433,050 or around 7,500 shares.
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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.16 in this case). So, $6,000 / $0.16 = 37,500 ($500 per month), and $1,200 / $0.16 = 7,500 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.
NVDA Price Action: Shares of Nvidia fell 2% to close at $857.74 on Monday.
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