How to Make $500 a Month in PepsiCo Stock Ahead of Q3 Earnings

PepsiCo, Inc. (NASDAQ:PEP) will report its third quarter earnings results before the opening bell on Tuesday, October 8th.

Analysts expect the Purchase, New York-based company to report quarterly earnings of $2.29 per share, up from $2.25 per share in the year-ago period. PepsiCo is expected to report revenue of $23.82 billion, up from $23.45 billion, according to data from Benzinga Pro.

Some investors may be considering the potential earnings from PepsiCo’s dividends. The company currently offers an annual dividend yield of 3.23%. That’s a quarterly dividend of $1.3550 per share ($5.42 per year).

So how can investors exploit their 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 about $185,943 or about 1,107 shares. For a more modest $100 a month or $1,200 a year, you’d need $37,121, or about 221 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($5.42 in this case). So $6,000 / $5.42 = 1,107 ($500 per month) and $1,200 / $5.42 = 221 shares ($100 per month).

Keep in mind that the dividend yield can change constantly because the dividend payout and stock price fluctuate over time.

See more earnings on PEP

How it works: Dividend yield is calculated by dividing the annual dividend payment by the current share 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 rises to $60, the dividend yield falls to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield increases to 5% ($2/$40).

Similarly, changes in dividend payments can affect yield. If a company increases its dividend, the yield will increase, provided the share price remains the same. Conversely, if the dividend payout falls, so will the yield.

Price action: PepsiCo shares fell 0.3 percent to close at $167.97 on Friday.

On October 4, RBC Capital analyst Nik Modi maintained PepsiCo with a Sector Perform and cut his price target from $177 to $176.

Barclays analyst Lauren Lieberman cut her price target from $187 to $186.

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This article How to Make $500 a Month in PepsiCo Stock Ahead of Q3 Earnings originally appeared on Benzinga.com

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