PepsiCo, Inc. (NASDAQ:DYNAMISM) closed at $168.90 on December 1, 2023. The New York-based food and beverage company has a market capitalization of $232.2 billion.
PepsiCo’s yield is 2.99% and the dividend is $5.04. The American multinational filed its 10-Q Report on October 10, 2023. For the 12 weeks ending September 9, 2023, the company reported dividend expenses of $1,748 million, 9.7% higher than the same period a year ago. For the 36 weeks ended September 9, 2023, cumulative dividend expense was $5,093 million, 8.7% higher than the dividend payment for the same period in 2022.
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Earn $500 per month with your PepsiCo investment
If you want to earn $500 per month ($6,000 per year) from PepsiCo dividends, the value of your investment should be $200,669. At $168.90 per common share, you will own approximately 1,188 shares of PepsiCo. If you consider a moderate income goal of $100 per month ($1,200 per year), the value of your investment is reduced to $40,134 or 238 shares.
Calculate the value of your investment using dividend yield: You can determine an approximate investment value based on two factors. One is your desired annual income of $6,000 or $1,200. The second is the stock’s dividend yield. Dividend yield is calculated by dividing annual dividend payments by the market price per common share.
If you want to earn $500 per month, the value of your investment will be the annual profit target of $6,000 divided by the dividend yield of 2.99% ($6,000/0.0299 = $200,669). When expected earnings are $100 per month or $1,200 per year, the calculation will be $1,200/0.0299 or $40,134.
Important note: The dividend yield may change over time due to changes in stock prices or a change in dividend payments. The above estimates assume the stock price is constant. If there is an appreciation in the stock price, the dividend yield decreases and vice versa. Thus, dividend yield and stock price are inversely correlated.
Let’s take a numerical example for clarity. If a stock pays $2 as an annual dividend and is valued at $50, its dividend yield would be $2/$50, or 4%. When the stock price appreciates to $60, the dividend yield decreases to 3.33% ($2/$60). When the stock price drops to $40, the dividend yield increases to 5% ($2/$40).
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This item How to Make $500 a Month from PepsiCo Stock (NASDAQ: PEP) originally appeared on Benzinga.com
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