Looking to supplement your income with The Coca-ColaCompany (NYSE:KO) dividends? Aiming for $500 monthly? Here’s how much you need to invest.
Coca-Cola's Financial Snapshot
As of Jan 18, Coca-Cola's shares were trading at $59.70. The company, with a market cap of $258 billion experienced a 52-week range between $64.99 and $51.55.
Analyzing Coca-Cola's Dividend Payouts
During the third quarter of 2023, Coca-Cola announced a dividend of $0.46 per share, a slight increase from $0.44 in the same period of 2022. The total dividends paid from January to September 2023 were $1.38, compared to $1.32 in the previous year.
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Investment Calculations for Desired Dividend Earnings
To consistently earn $500 per month from dividends, you’ll need to invest around $193,548 based on Coca-Cola's current dividend yield of 3.1%. This calculation is derived from dividing your annual dividend goal ($6,000) by the yield percentage. For a smaller goal of $200 monthly, the investment would be around $77,419.
Fluctuations in Dividend Yields
Let’s take a look at how dividend yield is impacted by stock price movements with a straightforward example. Consider a stock that consistently pays an annual dividend of $4. Initially, the stock is priced at $100, resulting in a dividend yield of 4% (calculated as $4 divided by $100). If the stock price rises to $120, while the dividend stays at $4, the yield reduces to approximately 3.33% ($4 divided by $120). On the other hand, if the stock price drops to $80, the yield would increase to 5% ($4 divided by $80). This example illustrates the inverse relationship between dividend yield and stock prices, assuming the dividend amount remains constant.
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To figure out how to earn $500 monthly from Coca-Cola dividends, we start with the yearly target of $6,000 ($500 x 12 months). So, an investor would need to own approximately $194,225 worth of Coca-Cola, or 3,261 shares to generate a monthly dividend income of $500.
Shares of public companies that split profits with shareholders by paying cash dividends yield between 2% and 6% a year. With that in mind, putting $250,000 into low-yielding dividend stocks or $83,333 into high-yielding shares will get your $500 a month.
The Coca-Cola Company's ( KO ) dividend yield is 3.09%, which means that for every $100 invested in the company's stock, investors would receive $3.09 in dividends per year. The Coca-Cola Company's payout ratio is 73.72% which means that 73.72% of the company's earnings are paid out as dividends.
Some experts recommend withdrawing 4% each year from your retirement accounts. To generate $500 a month, you might need to build your investments to $150,000. Taking out 4% each year would amount to $6,000, which comes to $500 a month.
However, this isn't always the case. If you're looking to generate $300 in super safe monthly dividend income (note the emphasis on "monthly" income), simply invest $43,000, split equally, into the following two ultra-high-yield stocks, which sport an average yield of 8.39%!
Coca-Cola isn't just a top dividend stock because of its high yield; the dividend is reliable and growing. co*ke paid $8 billion in dividends in 2023, with a payout ratio of 74%. That's in management's ideal zone; Coca-Cola's chief draw for investors is its rock-solid passive income stream.
You would have more than doubled your money, with a total investment worth of $2,029.55. That's a 103% return, or a 7.23% annual rate of return. Interestingly, despite co*ke's dominance on the world stage, investing in co*ke's main rival, Pepsi, 10 years ago would have given you more pop for your buck.
The business generates tons of free cash flow, to the tune of $9.7 billion in 2023. Even after investing in capital expenditures, there are a lot of resources left to fund dividends. The current 3.2% yield is healthy. But even more impressive, Coca-Cola has increased its annual dividend payout in 62 straight years.
In a market that generates a 2% annual yield, you would need to invest $600,000 up front in order to reliably generate $12,000 per year (or $1,000 per month) in dividend payments.
To generate $5,000 per month in dividends, you would need a portfolio value of approximately $1 million invested in stocks with an average dividend yield of 5%. For example, Johnson & Johnson stock currently yields 2.7% annually. $1 million invested would generate about $27,000 per year or $2,250 per month.
The amount is varied from high yield to lower yield. If you invest in higher yield company like Iron Mountain IRM, your portfolio only needs to have $132,680. However if you invest in everyone favorite dividend company Johnson and Johnson JNJ, you will need at least $439,366 in your portfolio.
In a market that generates a 2% annual yield, you would need to invest $600,000 up front in order to reliably generate $12,000 per year (or $1,000 per month) in dividend payments. How Can You Make $1,000 Per Month In Dividends?
Buy the index or pick individual stocks for passive income
Right now, the average dividend yield on the S&P/TSX 60 Index is around 3.11%. If you just bought the index, you would need to invest $154,340 to earn an average of $400 per month. Fortunately, you can do even better by picking individual stocks.
This broader mix of stocks offers higher payouts and greater diversification than what you'll get with the Invesco QQQ Trust. And if you've got a large portfolio totaling more than $1.1 million, your dividend income could come in around $50,000 per year.
Introduction: My name is Pres. Carey Rath, I am a faithful, funny, vast, joyous, lively, brave, glamorous person who loves writing and wants to share my knowledge and understanding with you.
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