Lowe’s Companies, Inc. (NYSE:LOW) is scheduled to report first-quarter earnings before the opening bell on Wednesday, May 20.
Analysts expect the home improvement retailer to post earnings of $2.97 per share, up from $2.92 a year earlier, on revenue of $22.88 billion compared with $20.93 billion last year, according to Benzinga Pro.
With growing attention on Lowe's stock, some investors remain focused on its dividend appeal. Lowe's currently offers an annual dividend yield of 2.20%, paying $1.20 per share quarterly, or $4.80 annually. Here's how much investors would need to invest in Lowe's to generate $500 in monthly dividend income.
To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $272,525 or around 1,250 shares. For a more modest $100 per month or $1,200 per year, you would need $54,505 or around 250 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.80 in this case). So, $6,000 / $4.80 = 1,250 ($500 per month), and $1,200 / $4.80 = 250 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: Compute the dividend yield 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.
LOW Price Action: Shares of Lowe’s fell 0.2% to close at $218.02 on Monday.
Ahead of the report, Stifel analyst W. Andrew Carter maintained a Hold rating on Lowe's shares Monday and lowered the price target from $270 to $220.
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