They say everything’s bigger in Silicon Valley — just kidding, that’s Texas. But, the ideas, innovation and certainly, the stakes are bigger in Silicon Valley.
One giant thriving amidst it all is Nvidia Corporation NVDA, which is at the heart of the AI revolution. Investors are piling into the stock as its share prices dance around all-time highs.
But in the race to capitalize on Nvidia’s meteoric growth, don’t overlook a less flashy but equally rewarding opportunity: Dividend payouts.
So, let’s shift gears from the thrill of stock prices, and options contracts, and talk about how Nvidia can bring $500 of dividend income into your pocket each month.
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For an investor interested in knowing how much stock they’d need to own to yield $500 per month they would have to multiply 500 by 12, with the 12 being each month in the year.
With $6,000 being the result, the investor would then divide 6,000 by Nvidia’s dividend yield, which is 0.04%, according to Benzinga Pro.
It would look something like this: 6000/0.0004.
With that being said, an investor would need to own a staggering $15 million, or 38,718 shares of Nvidia to yield $500 per month in dividends. We know, that’s a lot.
How about a more conservative amount — say, $100 per month. An investor would need to own $3 million, or 7,741 shares of the semiconductor giant.
It should be known that the 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.