December 9, 2023

Financial institution of America Corp BAC on Tuesday reported better-than-expected earnings for its third quarter.

The financial institution mentioned EPS for the quarter was $0.90, in comparison with $0.81 within the year-ago interval, beating the consensus of $0.81. Income elevated 3% year-over-year to $25.32 billion, beating the consensus of $25.14 billion.

With the thrill round Financial institution of America following upbeat earnings, some buyers could also be eyeing potential good points from the corporateā€™s dividends too. As of now, Financial institution of America affords an annual dividend yield of three.48%, which is a quarterly dividend quantity of 24 cents per share (96 cents a yr).

So, how can buyers exploit its dividend yield to pocket a daily $500 month-to-month?

To earn $500 per thirty days or $6,000 yearly from dividends alone, you would want an funding of roughly $172,625 or round 6,250 shares. For a extra modest $100 per thirty days or $1,200 per yr, you would want $34,525 or round 1,250 shares.

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To calculate: Divide the specified annual earnings ($6,000 or $1,200) by the dividend (0.96 on this case). So, $6,000 / 0.96= 6,250 ($500 per thirty days), and $1,200 / 0.96= 1,250 shares ($100 per thirty days).

Word that dividend yield can change on a rolling foundation, because the dividend cost and the inventory worth each fluctuate over time.

How that works: The dividend yield is computed by dividing the annual dividend cost by the inventory’s present worth.

For instance, if a inventory pays an annual dividend of $2 and is at the moment priced at $50, the dividend yield can be 4% ($2/$50). Nonetheless, if the inventory worth will increase to $60, the dividend yield drops to three.33% ($2/$60). Conversely, if the inventory worth falls to $40, the dividend yield rises to five% ($2/$40).

Equally, adjustments within the dividend cost can affect the yield. If an organization will increase its dividend, the yield will even enhance, offered the inventory worth stays the identical. Conversely, if the dividend cost decreases, so will the yield.

BAC Worth Motion: Shares of Financial institution of America gained 2.3% to shut at $27.62 on Tuesday.

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