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How To Earn $500 A Month From Broadcom Stock Following Recent Rally

Broadcom Inc (NASDAQ: AVGO) shares settled lower on Wednesday after recently surging to an all-time-high level.

On Dec. 7, Broadcom reported mixed fourth-quarter results and issued FY24 revenue guidance above estimates. The company also raised its dividend.

The company is making significant strides in the artificial intelligence (AI) field, partnering with major players like Alphabet Inc‘s Google and Comcast Corp.

With the recent buzz around Broadcom, some investors may be eyeing potential gains from the company’s dividends. As of now, Broadcom offers an annual dividend yield of 1.89%, which is a quarterly dividend amount of $5.25 per share ($21 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 $317,569 or around 286 shares. For a more modest $100 per month or $1,200 per year, you would need $63,292 or around 57 shares.

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View more earnings on AVGO

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($21 in this case). So, $6,000 / $21 = 286 ($500 per month), and $1,200 / $21 = 57 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.

AVGO Price Action: Shares of Broadcom fell 2.6% to close at $1,110.38 on Wednesday.

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