Personal Finance

How To Earn $1,000 Per Month From Coca-Cola (NYSE: KO) Stock

Coca-Cola Co. (NYSE:KO) stock was trading at $59.93 at the end of extended trading hours on Dec.13. The stock price dropped approximately 4.8% year-to-date, and the current market capitalization is $258.8 billion. The 52-week price range fluctuated between $51.55 to $64.99.

The American beverage company has a dividend yield of 3.14%. The company’s board declared a dividend of $0.46 per share in October, payable on Dec.15. In its 10-Q filing, the company disclosed that the dividend expenses for the nine months ending Sept. 29 were $4.078 billion. This is $168 million more than the dividend expenses for the same period last year.

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How Can You Earn $1,000 Per Month As A Coca-Cola Investor?

If your target is to make $1,000 per month — $12,000 annually — from Coca-Cola Co.’s dividends, you must invest about $382,166. At $59.93 a share, this translates to holding about 6,377 shares. However, if you reduce your target to $200 per month, the investment value reduces to $76,433 or 1,276 shares.

You can estimate your investment value with some basic calculations. The estimate can be derived using two key variables — the desired annual income of $12,000 or $2,400 per month and the dividend yield, which is 3.14% for Coca-Cola Co.

To earn $1,000 per month, your investment is close to $382,166 ($12,000 / 0.0314) and $76,433 ($2,400 / 0.0314) if you opt for a $200 monthly income.

An important note on investment value estimation: A company’s dividend yield may change over time. This change can be attributed to the movement in stock prices and the dividend payments on a rolling basis. In the above calculations, the appreciation or a drop in the price of Coca-Cola stock is not considered. Assuming that the stock price does not fluctuate or the capital appreciation is not factored into the calculations, the dividend value and its yield are positively correlated.

Assume a stock paying $2 as an annual dividend is trading at $50. The dividend yield would be $2 / $50 or 4%. When the stock price jumps to $60, the dividend yield drops to $2 / $60 or 3.33%. If the stock price falls to $40, this will trigger an inverse effect and increase the dividend yield to 5% ($2 / $40). As fluctuations in stock price impact the yield, changes in the company’s dividend policies also affect the yield.

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