How To Earn $500 A Month From Bank of America Stock Ahead Of Q4 Earnings

Investors are turning their absorption to Bank of America‘s (NYSE:BAC) dividend arsenic the lender heads into its upcoming net report.

Before the opening doorbell connected Wednesday, Jan. 14, analysts expect the slope to study fourth-quarter net of 96 cents per share. That’s up from 82 cents per stock successful the year-ago period. The statement estimation for Bank of America's quarterly gross is $27.62 cardinal (it reported $25.35 cardinal past year), according to Benzinga Pro.

Currently, Bank of America has an yearly dividend output of 1.99%. That’s a quarterly dividend magnitude of 28 cents per stock ($1.12 a year). How tin investors exploit its dividend output to pouch a regular $500 monthly?

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To gain $500 per period oregon $6,000 annually from dividends alone, you would request an concern of astir $300,956 oregon astir 5,357 shares. For a much humble $100 per period oregon $1,200 per year, you would request $60,169 oregon astir 1,071 shares.

To calculate: Divide the desired yearly income ($6,000 oregon $1,200) by the dividend ($1.12 successful this case). So, $6,000 / $1.12 = 5,357 ($500 per month), and $1,200 / $1.12 = 1,071 shares ($100 per month).

Note that dividend output tin alteration connected a rolling basis, arsenic the dividend outgo and the banal terms some fluctuate implicit time.

How that works: The dividend output is computed by dividing the yearly dividend outgo by the stock’s existent price.

For example, if a banal pays an yearly dividend of $2 and is presently priced astatine $50, the dividend output would beryllium 4% ($2/$50). However, if the banal terms increases to $60, the dividend output drops to 3.33% ($2/$60). Conversely, if the banal terms falls to $40, the dividend output rises to 5% ($2/$40).

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Similarly, changes successful the dividend outgo tin interaction the yield. If a institution increases its dividend, the output volition besides increase, provided the banal terms stays the same. Conversely, if the dividend outgo decreases, truthful volition the yield.

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