How to Make $500 a Month in Costco Stocks Ahead of Q4 Earnings

When Costco Wholesale Corporation (NASDAQ:COST) reports fourth-quarter earnings after the closing bell on Thursday, with analysts expecting the bulk retailer to report quarterly earnings of $5.08 per share.

That’s up from $4.86 per share a year ago. Costco plans to report revenue of $79.97 billion, compared with $78.94 billion a year earlier, according to Benzinga Pro.

On Sept. 24, Truist Securities analyst Scot Ciccarelli downgraded the Issaquah, Wash.-based company from Buy to Hold and maintained his $873 price target.

With the recent buzz surrounding Costco, some investors may be eyeing potential gains from the company’s dividend. Costco currently has a dividend yield of 0.51%. That’s a quarterly dividend of $1.16 per share ($4.64 per year).

To learn how to earn $500 monthly from Costco, start with an annual goal of $6,000 ($500 x 12 months).

We then take this amount and divide it by Costco’s $4.64 dividend: $6,000 / $4.64 = 1,293 shares

An investor would need to own approximately $1,174,587 or 150,000 shares of Costco to generate $500 of monthly dividend income.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $4.64 = 259 shares or $235,281 to generate a monthly dividend income of $100.

See more earnings on COST

Note that the dividend yield can change constantly. Dividend payouts and stock prices fluctuate over time.

Dividend yield is calculated by dividing the annual dividend payment by the current share price. As the share price changes, so will the dividend yield.

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 rises to $60, the dividend yield would drop to 3.33% ($2/$60).

Conversely, if the stock price falls to $40, the dividend yield would increase to 5% ($2/$40).

In addition, the dividend payout itself can change over time, which can also affect the dividend yield. If a company increases its dividend payout, the dividend yield will increase even if the stock price stays the same. Similarly, if a company lowers its dividend payout, the dividend yield will fall.

COST Price Action: Costco shares gained 0.8 percent to close at $908.42 on Wednesday.

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Image: Flickr/Mike Mozart

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This article How to Make $500 a Month in Costco Stock Ahead of Q4 Earnings originally appeared on Benzinga.com

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