How To Earn $500 A Month From Merck Stock Ahead Of Q2 Earnings

Merck & Co., Inc. (NYSE:MRK) will release earnings results for the second quarter before the opening bell on Tuesday, July 29.

Analysts expect the health care company to report quarterly earnings at $2.03 per share, down from $2.28 per share in the year-ago period. Merck projects to report quarterly revenue at $15.87 billion, compared to $16.11 billion a year earlier, according to data from Benzinga Pro.

With the recent buzz around Merck, some investors may be eyeing potential gains from the company's dividends. Merck offers an annual dividend yield of 3.82% — a quarterly dividend amount of 81 cents per share ($3.24 a year).

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

Next, we take this amount and divide it by Merck's $3.24 dividend: $6,000 / $3.24 = 1,852 shares.

So, an investor would need to own approximately $156,883 worth of Merck, or 1,852 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 / $3.24 = 370 shares, or $31,343 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.

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.

MRK Price Action: Shares of Merck rose by 0.7% to close at $84.71 on Friday.

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