Costco Stock: How to Make $500 a Month Ahead of Q4 Earnings – Costco Wholesale (NASDAQ:COST)

When Costco Wholesale Corporation COST After the company reports fourth-quarter earnings after the closing bell on Thursday, analysts expect the wholesaler to report quarterly profit of $5.08 per share.

That's up from $4.86 per share a year ago. According to Benzinga Pro, Costco expects to report sales of $79.97 billion, compared to $78.94 billion last year.

On Sept. 24, Truist Securities analyst Scot Ciccarelli downgraded the Issaquah, Washington-based company from “Buy” to “Hold” and maintained a price target of $873.

Given the recent excitement surrounding Costco, some investors may be eyeing potential gains from the company's dividends. Costco currently has a dividend yield of 0.51%. That equates to a quarterly dividend of $1.16 per share ($4.64 per year).

To figure out how to make $500 a month at Costco, start with an annual goal of $6,000 ($500 x 12 months).

Next, we divide this amount by Costco's dividend of $4.64: $6,000 / $4.64 = 1,293 shares

An investor would need to own about $1,174,587 worth of Costco or 150,000 shares to earn $500 in monthly dividend income.

Assuming a more conservative goal of $100 per month ($1,200 per year), we do the same calculation: $1,200 / $4.64 = 259 shares, or $235,281, to one to earn monthly dividend income of $100.

Please note that the dividend yield can change continuously. Both the dividend payment and the share price fluctuate over time.

The dividend yield is calculated by dividing the annual dividend payment by the current share price. When the stock price changes, the dividend yield also changes.

For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield is 4%. However, if the stock price rises to $60, the dividend yield would decrease to 3.33% ($2/$60).

Conversely, if the stock price falls to $40, the dividend yield would increase to 5% ($2/$40).

Additionally, the dividend payment itself can change over time, which can also affect the dividend yield. If a company increases its dividend payout, the dividend yield increases even if the share price remains the same. Likewise, if a company lowers its dividend payment, the dividend yield decreases.

COST price promotion: Costco shares rose 0.8% to close at $908.42 on Wednesday.

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Image: Flickr/Mike Mozart