Dell Technologies Inc. (NYSE:DELL) will release earnings results for the second quarter, after the closing bell on Thursday, Aug. 28.
Analysts expect the Round Rock, Texas-based company to report quarterly earnings at $2.29 per share. That’s up from $1.89 per share in the year-ago period.
With the recent buzz around Dell, some investors may be eyeing potential gains from the company's dividends. Currently, Dell offers an annual dividend yield of 1.58%, which is a quarterly dividend amount of 53 cents per share ($2.10 a year).
To earn $500 monthly from Dell, start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Dell's $2.10 dividend: $6,000 / $2.10 = 2,857 shares.
So, an investor would need to own approximately $378,553 worth of Dell, or 2,857 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 / $2.10 = 571 shares, or $75,658 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.
DELL Price Action: Shares of Dell rose by 1.2% to close at $132.50 on Wednesday.
On Aug. 21, Morgan Stanley analyst Erik Woodring maintained Dell with an Overweight rating and raised the price target from $135 to $144.
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