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Hormel Foods Corporation (NYSE:HRL) is set to release earnings results for its third quarter, after the closing bell on Wednesday, Sept. 4.
Some investors may be eyeing potential gains from the company's dividends too. As of now, Hormel Foods offers an annual dividend yield of 3.47%. That’s a quarterly dividend amount of 28.25 cents per share ($1.13 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 $172,841 or around 5,310 shares. For a more modest $100 per month or $1,200 per year, you would need $34,568 or around 1,062 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.13 in this case). So, $6,000 / $1.13 = 5,310 ($500 per month), and $1,200 / $1.13 = 1,062 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.
HRL Price Action: Shares of Hormel Foods gained 1.1% to close at $32.55 on Friday.
Analysts expect the Austin, Minnesota-based company to report quarterly earnings at 36 cents per share, down from 40 cents per share in the year-ago period. Hormel Foods projects to report quarterly revenue of $2.95 billion for the quarter, according to data from Benzinga Pro.
On Aug. 19, Hormel Foods reported the retirement of Deanna Brady, executive vice president of retail, at the end of the fiscal year on Oct. 27, 2024.
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