How To Earn $500 A Month From Charles Schwab Stock Ahead Of Q3 Earnings

With the recent buzz around Charles Schwab‘s (NYSE:SCHW) third quarter earnings report, to be released before the opening bell on Thursday, Oct. 15, some investors may be eyeing potential gains from company dividends. Currently, Charles Schwab has an annual dividend yield of 1.33%, which is a quarterly dividend amount of 32 cents per share ($1.28 a year). To figure out how to earn $500 monthly from Charles Schwab, we start with the yearly target of $6,000 ($500 x 12 months). Next, we take this amount and divide it by SCHW’s $1.28 dividend: $6,000 / $1.28 = 4,688 shares. So, an investor would need to own approximately $449,767 worth of Charles Schwab, or 4,688 shares to generate a monthly dividend income of $500. Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $1.28 = 938 shares, or $89,992 to generate a monthly dividend income of $100. Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time. The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change. 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 increases to $60, the dividend yield would decrease to 3.33% ($2/$60). Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40). Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease. Price Action Shares of Charles Schwab fell 1.2% to close at $95.94 on Tuesday. Analysts expect the company to report quarterly earnings of $1.66 per share, up from $1.31 per share in the year-ago period. The consensus estimate for SCHW’s quarterly revenue is $7.19 billion. It reported $6.13 billion last year, according to Benzinga Pro. Ahead of quarterly earnings, Truist Securities analyst David Smith, on Tuesday, maintained Charles Schwab with a Buy and lowered the price target from $130 to $125. Photo via Shutterstock