Apple Inc. (NASDAQ:AAPL) shares settled slightly higher during Monday's session.
Apple is on track to become the first company to reach a $4 trillion market capitalization by "early 2025," driven by strong iPhone sales and artificial intelligence innovations, according to Wedbush Securities analyst Dan Ives.
The tech giant's shares have surged nearly 40% since January, closing at $255 per share on Monday with a market cap of $3.86 trillion. This performance puts Apple ahead of rivals NVIDIA Corp. (NASDAQ:NVDA) at $3.35 trillion and Microsoft Corp. (NASDAQ:MSFT) at $3.22 trillion.
With the recent buzz around Apple, some investors may be eyeing potential gains from the company's dividends too. Currently, Apple offers an annual dividend yield of 0.39%, a quarterly dividend amount of 25 cents per share ($1.00 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 $1,531,620 or around 6,000 shares. For a more modest $100 per month or $1,200 per year, you would need $306,324 or around 1,200 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.00 in this case). So, $6,000 / $1.00 = 6,000 ($500 per month), and $1,200 / $1.00 = 1,200 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.
AAPL Price Action: Shares of Apple gained 0.3% to close at $255.27 on Monday.
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