Micron Technology, Inc. (MU) is gearing up to release its fourth-quarter earnings results after the closing bell on Wednesday, September 25th. As investors eagerly await the report, they may be drawn to the potential gains offered by Micron’s dividends.
Based in Boise, Idaho, Micron currently boasts an annual dividend yield of 0.49%, translating to a quarterly dividend payment of 11.5 cents per share (46 cents annually).
But how can investors leverage this dividend yield to achieve a consistent monthly income stream? Let’s break it down:
To generate $500 per month, or $6,000 annually, solely from dividends, you would need to invest approximately $1,226,042 or hold around 13,043 shares. For a more modest $100 per month, or $1,200 per year, you would need an investment of $245,246 or approximately 2,609 shares.
Here’s the calculation:
Divide your desired annual income ($6,000 or $1,200) by the dividend amount (in this case, $0.46). So, $6,000 / $0.46 = 13,043 shares ($500 per month), and $1,200 / $0.46 = 2,609 shares ($100 per month).
It’s important to note that dividend yield is subject to fluctuations. Both the dividend payment and the stock price are dynamic factors, causing the yield to change over time.
Understanding Dividend Yield:
The dividend yield is calculated by dividing the annual dividend payment by the stock’s current price. For instance, if a stock pays an annual dividend of $2 and is currently valued at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the yield drops to 3.33% ($2/$60). Conversely, if the stock price declines to $40, the dividend yield rises to 5% ($2/$40).
Similarly, changes in the dividend payment directly impact the yield. If a company boosts its dividend, the yield will also increase, assuming the stock price remains constant. On the other hand, a decrease in dividend payment will lead to a corresponding decrease in the yield.
Micron’s Price Action:
At the time of this writing, shares of Micron gained 1.8% and are currently trading at $95.69, according to Benzinga Pro. Analysts anticipate Micron to report quarterly earnings of $1.13 per share, in contrast to a loss of $1.07 per share in the same period last year. Revenue for the quarter is projected to reach $7.64 billion, marking a significant increase from just over $4 billion a year prior.
Micron recently unveiled the Crucial P310 2280 Gen4 NVMe solid-state drive (SSD), expanding their P310 portfolio to cater to PCs, laptops, and PlayStation 5. The company has announced that a version equipped with a heatsink will be released in the coming months, specifically designed for use with PlayStation 5 and desktop gaming PCs.
As Micron prepares to unveil its earnings report, investors will be closely watching the company’s performance and the potential impact on its dividend yield, a key factor for those seeking a steady income stream from their investments.
