Microsoft Corp. (NASDAQ:MSFT) shares closed at $405.65 at the close of trading on February 5. The stock price has fluctuated between a high of $415.32 and a low of $245.61 over the previous 52 weeks.
On January 30, the American technology company presented its quarterly financial figures for the period ending December 31, 2023. The Financial Activities section of Microsoft's statement of cash flows reported cash dividends paid of $5.57 billion for the quarter, compared to $5.07 billion in the same quarter of 2022. The company has a quarterly dividend of 0 .75 US dollars per share.
Based on a quarterly dividend of $0.75 per share, Microsoft's annual dividend payout is $3. Based on the share price as of February 5th, the dividend yield is 0.74%.
How can you make $500 per month as a Microsoft investor?
If you set a profit target of $500 per month or $6,000 per year from Microsoft's dividends, your estimated investment value would be $810,810, which is about 1,999 shares at $405.65 each. If your goal is $100 per month, the investment value drops to $162,162, or about 400 shares.
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Calculating the estimated value of investments using dividend yield: To make an estimate you need two key factors. One is your desired annual profit target – $6,000 or $1,200 – and the second is the stock's dividend yield, which in this case is 0.74%. So: $6,000 / 0.0074 = $810,810 to generate an income of $500 per month, and $1,200 / 0.0074 = $162,162 for $100 per month.
To determine a stock's dividend yield, divide its annual dividend payments by the stock's current price. The dividend yield may change over time due to a change in stock price or dividend payments.
Assuming the stock price remains constant, the dividend yield tends to increase as the company's dividend value increases and vice versa. The dividend yield and the value of the dividend are positively correlated.
Suppose a stock that pays a $2 annual dividend has a price of $50. The dividend yield would be $2 / $50 = 4%. If the stock price rises to $60, the dividend yield drops to 3.33% ($2 / $60). A drop in the stock price to $40 has a reverse effect, increasing the dividend yield to 5% ($2/$40).
Disclaimer: This calculation is based on the price per share as of February 5th using an annualized dividend. Microsoft shares were trading at $405.65 at the close of trading on February 5th.
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This article, “How to Make $500 a Month With Microsoft Stock” originally appeared on Benzinga.com
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