Broadcom Inc. (NASDAQ:AVGO) posted upbeat earnings for its third quarter, but issued a weak forecast for the current quarter.
The company posted quarterly revenue of $8.88 billion, which exceeded market estimates of $8.86 billion. The company’s earnings came in at $10.54 per share, topping expectations of $10.42 per share.
Broadcom anticipates fourth-quarter revenue of approximately $9.27 billion versus estimates of $9.28 billion. Adjusted EBITDA is expected to be approximately 65% of forecasted quarterly revenue.
With Broadcom reporting strong quarterly earnings, some investors may be eyeing potential gains from the company’s dividends. As of now, Broadcom has a dividend yield of 2.06%, which is a quarterly dividend amount of $4.60 a share ($18.40 a year).
To figure out how to earn $500 monthly from Broadcom dividends, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Broadcom’s $18.40 dividend: $6,000 / $18.40 = 326 shares
So, an investor would need to own approximately $300,862 worth of Broadcom, or 326 shares to generate a monthly dividend income of $500.
Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / 18.40 = 65 shares, or $59,988 to generate a monthly dividend income of $100.
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Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.
For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).
Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).
Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.
AVGO Price Action: Shares of Broadcom gained 3.4% to close at $922.89 on Thursday.
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