Nvidia Corporation (NASDAQ:NVDA) shares closed higher on Thursday as semiconductor stocks recorded gains following strong quarterly results from Qualcomm (NASDAQ: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 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, some investors may be eyeing potential gains from the company’s dividends, too. As of now, Nvidia 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 gained 3.3% to close at $858.17 on Thursday.
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