How to make $500 a month in HP stock ahead of the second quarter earnings report

HP Inc. (NYSE:HPQ) will release second-quarter earnings results after the closing bell on Wednesday.

Analysts expect the Palo Alto, California-based company to report quarterly earnings of 81 cents per share, up from 80 cents per share in the same period a year ago. HP is expected to post quarterly revenue of $12.6 billion, according to Benzinga Pro.

On May 21, Barclays analyst Tim Long upgraded HP from Underweight to Equal Weight, while increasing his price target from $24 to $30.

With the recent buzz around HP, some investors may be paying attention to the company’s dividend yield potential. HP currently has a dividend yield of 3.33%, which represents a quarterly dividend of 27.56 cents per share ($1.102 per year).

To learn how to earn $500 per month from HP, we start with an annual goal of $6,000 ($500 x 12 months).

We then divide this amount by HP’s dividend of $1,102: $6,000 / $1,102 = 5,445 shares

So an investor would need to own approximately $180,447 worth of HP stock, or 5,445 shares, to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 per month ($1,200 per year), we do the same calculation: $1,200 / $1,102 = 1,089 shares, or $36,089, to generate monthly dividend income of $100.

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See more earnings on HPQ

Keep in mind that the dividend yield can change continuously because both the dividend payment and the share price change over time.

Dividend yield is calculated by dividing the annual dividend payment by the current share price. As the share 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, the dividend yield will be 4%. 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 will increase to 5% ($2/40).

Moreover, the dividend payout itself may also change over time, which may also impact the dividend yield. If a company increases its dividend payout, the dividend yield will increase even if the share price remains the same. Similarly, if a company reduces its dividend payout, the dividend yield will decline.

HPQ Price Action: HP shares rose 1.2% to close at $33.14 on Tuesday.

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This article How to Make $500 a Month in HP Stock Ahead of the Q2 Earnings Report originally appeared on Benzinga.com