How to Earn $500 A Month From Cisco Stock Ahead of Q1 Earnings

Cisco Systems Inc (NASDAQ:CSCO) investors may be eyeing potential gains from company dividends ahead of its first-quarter earnings report.

Currently, Cisco has an annual dividend yield of 1.71%, with a quarterly dividend of 42 cents per share ($1.68 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 $350,494, or around 3,571 shares. For a more modest $100 per month or $1,200 per year, you would need $70,079 or around 714 shares.

To Calculate

Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.68 in this case). So, $6,000 / $1.68 = 3,571 shares ($500 per month), and $1,200 / $1.68 = 714 shares ($100 per month).

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

How That 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 is currently priced at $50, the dividend yield would be 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 the dividend payment can impact the 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, so will the yield.

CSCO Price Action

Shares of Cisco fell 0.5% to close at $98.15 on Tuesday.

Analysts expect the company to report quarterly earnings of $1.32 per share after the closing bell on Thursday. That’s up from $1.00 per share a year ago. The consensus estimate for Cisco’s quarterly revenue is $18.12 billion. It reported $14.88 billion last year, according to Benzinga Pro.

On Nov. 5, Morgan Stanley analyst Meta Marshall downgraded Cisco from Overweight to Equal-Weight and lowered the price target from $135 to $120.

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