Texas Instruments Incorporated (NASDAQ:TXN) is set to release earnings results for its first quarter, after the closing bell on Tuesday.
Analysts expect the Dallas, Texas-based company to report quarterly earnings at $1.07 per share, down from $1.85 per share in the year-ago period. Texas Instruments is projected to post revenue of $3.61 billion, compared to $4 billion in the year-earlier quarter, according to data from Benzinga Pro.
On April 16, Evercore ISI Group analyst Mark Lipacis initiated coverage on Texas Instruments with an Outperform rating and announced a price target of $213.
With the recent buzz around Texas Instruments, some investors may be eyeing potential gains from the company’s dividends too. As of now, Texas Instruments offers an annual dividend yield of 3.18%, which is a quarterly dividend amount of $1.30 per share ($5.20 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 approximately $188,598 or around 1,154 shares. For a more modest $100 per month or $1,200 per year, you would need $37,752 or around 231 shares.
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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($5.20 in this case). So, $6,000 / $5.20 = 1,154 ($500 per month), and $1,200 / $5.20 = 231 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.
TXN Price Action: Shares of Texas Instruments rose 2.4% to close at $163.43 on Monday.
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