Best Buy Co., Inc. (NYSE:BBY) will release earnings results for the third quarter, before the opening bell on Tuesday, Nov. 25.
Analysts expect the retailer to report quarterly earnings at $1.31 per share, up from $1.26 per share in the year-ago period. The consensus estimate for Best Buy's quarterly revenue is $9.59 billion, according to data from Benzinga Pro. Compare that to the $9.45 billion it reported a year earlier.
Some investors may be eyeing potential dividend gains from the company. Currently, Best Buy offers an annual dividend yield of 4.97%, with a quarterly dividend of 95 cents per share ($3.80 a year).
To figure out how to earn $500 monthly from Best Buy, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we divide this amount by Best Buy's $3.80 dividend: $6,000 / $3.80 = 1,579 shares.
So, an investor would need to own approximately $120,715 worth of Best Buy, or 1,579 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 / $3.80 = 316 shares, or $24,158 to generate a monthly dividend income of $100.
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.
BBY Price Action: Shares of Best Buy gained by 3.6% to close at $76.45 on Friday.
On Nov. 18, Telsey Advisory Group analyst Joseph Feldman maintained Best Buy with an Outperform rating and maintained a $90 price target.
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