Investors in Meta Platforms Inc. (NASDAQ:META) may be eyeing potential gains from the company's dividends.
The Facebook parent company currently offers an annual dividend yield of 0.32%. That's a quarterly dividend of 50 cents per share ($2.00 a year).
To earn $500 monthly from Meta, we start with a yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Meta's $2.00 dividend: $6,000 / $2.00 = 3,000 shares.
So, an investor would need to own approximately $1,892,370 worth of Meta, or 3,000 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 / $2.00 = 600 shares, or $378,474 to generate a monthly dividend income of $100.
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.
Price Action: Shares of Meta fell by 0.3% to close at $630.79 on Thursday.
Meta CEO Mark Zuckerberg sold approximately $88 million worth of company stock over the past week, according to regulatory filings with the U.S. Securities and Exchange Commission on Wednesday.
The sales occurred in two tranches, with Zuckerberg divesting $43.82 million in shares last week followed by an additional $44.29 million this week.
The transactions were executed at prices ranging from $607.97 to $621.88 per share, filings show. The company's stock jumped more than 82% year-to-date.
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