Benzinga - by Avi Kapoor, Benzinga Staff Writer.
Oracle Corporation (NYSE: ORCL) reported mixed financial results for its second quarter on Monday.
Oracle reported quarterly adjusted earnings of $1.34 per share, topping the Street's estimate of $1.32. Revenue of $12.94 billion fell short of the analyst consensus estimate of $13.05 billion, according to Benzinga Pro.
With the recent buzz around Oracle following upbeat earnings, some investors may be eyeing potential gains from the company’s dividends. As of now, Oracle has a dividend yield of 1.39%, which is a quarterly dividend amount of 40 cents a share ($1.60 a year).
To figure out how to earn $500 monthly from Oracle dividends, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Oracle $1.60 dividend: $6,000 / $1.60 = 3,750 shares
So, an investor would need to own approximately $431,738 worth of Oracle, or 3,750 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 / $1.60 = 750 shares, or $86,348 to generate a monthly dividend income of $100.
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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.
ORCL Price Action: Shares of Oracle gained 1.3% to close at $115.13 on Monday.
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