Pfizer Inc (NYSE:PFE) investors may be eyeing potential gains from the company’s dividends ahead of its third-quarter report on Tuesday, Nov. 3.
Currently, Pfizer has an annual dividend yield of 5.64%, with a quarterly dividend of 43 cents per share ($1.72 a year). So, how can investors exploit its 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 $106,454 or around 3,488 shares. For a more modest $100 per month or $1,200 per year, you would need $21,303 or around 698 shares.
To Calculate
Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.72 in this case). So, $6,000 / $1.72 = 3,488 shares ($500 per month), and $1,200 / $1.72 = 698 shares ($100 per month).
Note that dividend yield can change on a rolling basis, as dividend payments and stock prices both fluctuate over time.
How It 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 trades at $50, the dividend yield is 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 dividend payments can affect 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, the yield will too.
Price Action
Pfizer shares gained 1.9% to close at $30.52 on Friday.
Analysts expect the company to report quarterly earnings of 73 cents per share, down from 87 cents per share a year ago. The consensus estimate for Pfizer’s quarterly revenue is $15.88 billion. It reported $16.65 billion last year, according to Benzinga Pro.
On Oct. 27, Pfizer released topline results from its Phase 3 MagnetisMM-32 study evaluating Elrexfio (elranatamab) as a monotherapy.
With the recent buzz around Pfizer, s
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