Cisco Systems, Inc. (NASDAQ:CSCO) will release its third-quarter financial results after the closing bell on Wednesday, May 14.
Analysts expect the San Jose, California-based company to report quarterly earnings at 92 cents per share, up from 88 cents per share in the year-ago period. Cisco projects quarterly revenue of $14.06 billion, compared to $12.7 billion a year earlier, according to data from Benzinga Pro.
On April 28, Evercore ISI Group analyst Amit Daryanani maintained Cisco with an Outperform rating and lowered the price target from $75 to $67.
The recent buzz around Cisco may have investors eyeing potential gains from the company’s dividends. Currently, Cisco offers an annual dividend yield of 2.66%. That’s a quarterly dividend of 41 cents per share ($1.64 a year).
To figure out how to earn $500 monthly from Cisco, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Cisco’s $1.64 dividend: $6,000 / $1.64 = 3,659 shares.
So, an investor would need to own approximately $225,651 worth of Cisco, or 3,659 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 / $1.64 = 732 shares, or $45,142 to generate a monthly dividend income of $100.
Investors should note that dividend yields can change on a rolling basis. 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.
CSCO Price Action: Shares of Cisco gained by 3.2% to close at $61.67 on Monday.
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