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American Express Company (NYSE:AXP) will release its second-quarter financial results, before the opening bell on Friday, July 19.
Analysts expect the New York-based company to report quarterly earnings at $3.25 per share, up from $2.89 per share in the year-ago period. American Express will post revenue of $16.59 billion, compared to $15.05 billion a year earlier, according to data from Benzinga Pro.
On July 16, Compass Point analyst David Rochester initiated coverage on American Express with a Neutral rating and announced a price target of $260.
With the recent buzz around American Express, some investors may be eyeing potential gains from the company's dividends, too. As of now, American Express offers an annual dividend yield of 1.12%. That’s a quarterly dividend amount of 70 cents per share ($2.80 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 $535,664 or around 2,143 shares. For a more modest $100 per month or $1,200 per year, you would need $107,233 or around 429 shares.
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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($2.80 in this case). So, $6,000 / $2.80 = 2,143 ($500 per month), and $1,200 / $2.80 = 429 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.
AXP Price Action: Shares of American Express rose 0.1% to close at $249.96 on Wednesday.
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