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

Nike, Inc (NYSE:NKE) will release earnings for its second quarter, after the closing bell on Thursday, Dec. 19.

Analysts expect the Beaverton, Oregon-based company to report quarterly earnings at 63 cents per share, down from $1.03 per share in the year-ago period. Nike projects to report quarterly revenue of $12.11 billion, compared to $13.39 billion a year earlier, according to data from Benzinga Pro.

With the recent buzz around Nike ahead of quarterly earnings, some investors are eyeing potential gains from the company's dividends. The apparel maker currently offers an annual dividend yield of 2.08%. That’s a quarterly dividend amount of 40 cents per share ($1.60 a year).

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

Next, we take this amount and divide it by Nike's $1.60 dividend: $6,000 / $1.60 = 3,750 shares.

So, an investor would need to own approximately $288,375 worth of Nike, or 3,750 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 / $1.60 = 750 shares, or $57,675 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.

Price Action: Shares of Nike fell by 1.4% to close at $76.90 on Wednesday.

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