Currently, the tech company offers an annual dividend yield of 0.67%. That’s a quarterly dividend amount of 83 cents per share ($3.32 a year).
So, how can investors capitalize on the dividend yield to earn a regular $500 monthly?
To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $889,134 or around 1,807 shares. For a more modest $100 per month or $1,200 per year, you would need $177,630 or around 361 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($3.32 in this case). So, $6,000 / $3.32 = 1,807 ($500 per month), and $1,200 / $3.32 = 361 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.
Price Action: Shares of Microsoft fell 1.1% to close at $492.05 on Tuesday.
Microsoft’s stock has surged over 31% in the last three months. It outpaces both the S&P 500 Index's approximately 11% gain and the NASDAQ Composite Index's roughly 16% gain.
Observers attribute this momentum to Microsoft's commanding presence in cloud computing, particularly through its Azure platform, and artificial intelligence (AI).
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