As Worthington Enterprises, Inc. (NYSE:WOR) prepares to release first-quarter earnings after the closing bell on Tuesday, Sept. 22, some investors may be eyeing potential gains from its dividends.
Currently, Worthington has an annual dividend yield of 1.36%, with a quarterly dividend of 20 cents per share (80 cents a year).
So, how can investors exploit its dividend yield to pocket a regular $500 monthly?
To earn $500 per month, or $6,000 annually, from dividends alone, you would need an investment of about $441,300, or around 7,500 shares. For a more modest $100 per month or $1,200 per year, you would need $88,260 or around 1,500 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.80 in this case). So, $6,000 / $0.80 = 7,500 ($500 per month), and $1,200 / $0.80 = 1,500 shares ($100 per month).
Note that dividend yield can change on a rolling basis, as dividend payments and stock prices both fluctuate over time.
How That Works
The dividend yield is computed by dividing the annual dividend payment by the stock’s current price.
For example, if a stock pays an annual dividend of $2 and trades at $50, the dividend yield is 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 dividend payments can affect 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, the yield will too.
Price Action
Shares of Worthington Enterprises gained 8.2% to close at $58.84 on Wednesday; the calculations are based on that share price.
Analysts expect the company to report quarterly earnings of 75 cents per share, up from 74 cents per share a year ago. The consensus estimate for WOR’s quarterly revenue is $331.27 million. It reported $303.71 million last year, according to Benzinga Pro.
Worthington Enterprises reported worse-than-expected fourth-quarter financial results on June 23.
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