At the end of the trading hours of February 12, McDonald’s Corp. (NYSE:MCD) stock sat at $289.44. The price range for the stock in the preceding 52 weeks fluctuated between a high of $302.39 and a low of $245.73.
McDonald’s currently pays a quarterly dividend of $1.67 per share, equating to an annualized dividend of $6.68 per share and giving its stock a yield of about 2.31% based on the stock’s closing price on February 12.
How Can You Earn $1,000 Per Month As A McDonald’s Investor?
Assuming your earnings target is $1,000 per month or $12,000 annually from McDonald’s dividends, you would need to invest approximately $519,481, which is 1,795 shares at $289.44 each. However, if you opt for an earning target of $200 per month, the estimated investment value reduces to $103,896 or 359 shares.
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Determining your estimated investment value using dividend yields: You can calculate an estimated value of investments using two key parameters. One is your desired annual earnings target — $12,000 or $2,400 — and the second is the stock yield, which is 2.31% in this case). So, $12,000 / 0.0231 = $519,481 to generate an income of $1,000 per month, and $2,400 / 0.0231 = $103,896 for $200 per month.
The dividend yield of a stock can be calculated by dividing its annual dividend payouts by the current price of the stock. However, it is important to note that a stock’s dividend yield may change because of fluctuations in stock prices. As the stock price may affect its yield, any changes in the dividend policies can also impact the yield.
Considering that the stock price remains unchanged, its dividend yield will rise when the payout increases and vice versa. This is an indicator of the positive correlation between a stock’s dividend yield and the payouts.
For instance, assume a stock that pays a $2 annual dividend is priced at $50. Its dividend yield would be $2 / $50 = 4%. If the stock price rises to $60, the dividend yield drops to 3.33% ($2 / $60). A drop in stock price to $40 will have an inverse effect and increase the dividend yield to 5% ($2 / $40).
Disclaimer: This calculation is according to the price per share on February 12 using an annualized dividend. The price of McDonald’s stock at the end of trading on February 12 was $289.44.
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This article How To Earn $1,000 Per Month From McDonald’s Stock originally appeared on Benzinga.com
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Source: finance.yahoo.com