How To Earn $500 A Month From Nvidia Stock Ahead Of Q1 Earnings Report

BY Benzinga | ECONOMIC | 05/03/24 08:56 AM EDT

Nvidia Corporation (NVDA) shares closed higher on Thursday as semiconductor stocks recorded gains following strong quarterly results from Qualcomm (QCOM) .

The Federal Open Market Committee (FOMC) did not intend to raise rates and is still open to lowering them before the year is out. The semiconductor industry, a high-growth sector, responded well to the news. Typically, investors are scared away from high-growth equities in high-interest rate environments.

Nvidia (NVDA) is scheduled to host a conference call on Wednesday, May 22, to discuss its financial results for the first quarter of fiscal year 2025.

Analysts expect the company to report quarterly earnings at $5.55 per share on revenue of $24.49 billion.

With the recent buzz around Nvidia (NVDA), some investors may be eyeing potential gains from the company's dividends, too. As of now, Nvidia (NVDA) offers an annual dividend yield of 0.02%, which is a quarterly dividend amount of 4 cents per share (16 cents a year).

So, how can investors exploit its dividend yield to pocket a regular $500 monthly?

To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $32,181,375 or around 37,500 shares. For a more modest $100 per month or $1,200 per year, you would need $6,436,275 or around 7,500 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.16 in this case). So, $6,000 / $0.16 = 37,500 ($500 per month), and $1,200 / $0.16 = 7,500 shares ($100 per month).

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

How that works: The dividend yield is computed by dividing the annual dividend payment by the stock’s current price.

For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40).

Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield.

NVDA Price Action: Shares of Nvidia (NVDA) gained 3.3% to close at $858.17 on Thursday.

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Image: Shutterstock

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.