How To Earn $500 A Month From Bank of America Stock Ahead Of Q2 Earnings

Bank of America Corporation (NYSE:BAC) will release earnings results for the second quarter before the opening bell on Wednesday, July 16.

Some investors may be eyeing potential gains from the firm's dividends. Currently, Bank of America offers an annual dividend yield of 2.20% — a quarterly dividend of 26 cents per share ($1.04 a year).

To figure out how to earn $500 monthly from Bank of America, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by Bank of America's $1.04 dividend: $6,000 / $1.04 = 5,769 shares.

So, an investor would need to own approximately $269,585 worth of Bank of America, or 5,769 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 / $1.04 = 1,154 shares, or $53,926 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis; the dividend payment and the stock price 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.

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.

BAC Price Action: Shares of Bank of America fell by 0.5% to close at $46.73 on Friday.

Analysts expect the Charlotte, North Carolina-based company to report quarterly earnings at 87 cents per share. That’s up from 83 cents per share a year ago. Bank of America projects to report quarterly revenue at $26.77 billion. Compare that to $25.38 billion a year earlier, according to data from Benzinga Pro.

On July 9, Truist Securities analyst John McDonald maintained a Buy and raised the price target from $51 to $53.

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