As investors increasingly turn towards stable income streams amid market volatility, Domino’s Pizza, Inc.’s (NASDAQ:DPZ) forthcoming earnings report has caught the spotlight, not just for its potential impact on share prices, but also for its enticing dividend offerings.
Analysts expect the pizza company to report quarterly earnings at $3.96 per share, down from $4.03 per share in the year-ago period. Domino’s Pizza is projected to report quarterly revenue of $1.14 billion, compared to $1.1 billion a year earlier, according to data from Benzinga Pro.
On July 10, Morgan Stanley analyst Brian Harbour maintained a rating of Overweight for Domino’s Pizza and raised the price target from $510 to $514.
With the recent buzz around Domino’s Pizza, some investors may be eyeing potential gains from the company’s dividends. As of now, Domino’s offers an annual dividend yield of 1.48%, which is a quarterly dividend amount of $1.74 per share ($6.96 a year).
To figure out how to earn $500 monthly from Domino’s Pizza, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by Domino’s $6.96 dividend: $6,000 / $6.96 = 862 shares.
So, an investor would need to own approximately $404,019 worth of Domino’s Pizza, or 862 shares to generate a monthly dividend income of $500.
Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $6.96 = 172 shares, or $80,616 to generate a monthly dividend income of $100.
Note that 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.
DPZ Price Action: Shares of Domino’s Pizza rose by 0.7% to close at $468.70 on Thursday.
