Bank of America Corporation (NYSE:BAC) will release its third-quarter earnings report before the opening bell on Wednesday, Oct. 14.
Analysts expect the company to report quarterly earnings of $1.10 per share, up from $1.06 per share a year ago. The consensus estimate for Bank of America’s quarterly revenue is $30.54 billion. It reported $28.09 billion last year, according to Benzinga Pro.
Ahead of quarterly earnings, TD Cowen analyst R. Scott Siefers reinstated Bank of America with a Hold rating on Oct. 8 and set a $60 price target.
With the recent buzz around Bank of America, some investors may be eyeing potential gains from the company’s dividends too. Currently, Bank of America has an annual dividend yield of 2.35%, with a quarterly dividend of 32 cents per share ($1.28 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 $255,871 or around 4,688 shares. For a more modest $100 per month ($1,200 per year), you would need $51,196 or about 938 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.28 in this case). So, $6,000 / $1.28 = 4,688 shares ($500 per month), and $1,200 / $1.28 = 938 shares ($100 per month).
Note that dividend yield can change on a rolling basis, as dividend payments and stock prices 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 dividend payments can affect 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, the yield will also fall.
BAC Price Action: Bank of America shares rose 0.5% to close at $54.58 on Monday.
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