Benzinga - by Avi Kapoor, Benzinga Staff Writer.
Verizon Communications Inc. (NYSE: VZ) shares closed slightly lower on Wednesday, despite an overall increase in the stock market.
The company is launching a unique streaming bundle partnership with Netflix, Inc (NASDAQ: NFLX) and Warner Bros. Discovery, Inc (NASDAQ: WBD) Max, offering ad-supported services from these entertainment giants together for the first time.
Verizon is expected to report fourth-quarter 2023 earnings before the opening bell on Jan. 23, 2024.
Oppenheimer analyst Timothy Horan, last week, reiterated Verizon Communications with an Outperform and maintained a $43 price target.
With the recent buzz around Verizon, some investors may be eyeing potential gains from the company’s dividends, too.
As of now, Verizon offers an annual dividend yield of 7.13%, which is a quarterly dividend amount of 66.5 cents per share ($2.66 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 $84,171 or around 2,256 shares. For a more modest $100 per month or $1,200 per year, you would need $16,827 or around 451 shares.
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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.66 in this case). So, $6,000 / $2.66 = 2,256 ($500 per month), and $1,200 / $2.66 = 451 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.
VZ Price Action: Shares of Verizon fell 0.5% to close at $37.31 on Wednesday.
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