How To Earn \$500 A Month From Eli Lilly Stock Ahead Of Q1 Earnings Report

Eli Lilly and Company +0.73% Post
 Eli Lilly and Company LLY 891.46 890.06 +0.73% -0.16% Post

Eli Lilly and Company (NYSE:LLY) is set to report first-quarter earnings on Tuesday, April 30.

Analysts expect the Indianapolis, Indiana-based company’s quarterly earnings to be \$2.46 per share, up from \$1.62 per share in the year-ago period. Eli Lilly is projected to post revenue of \$8.92 billion, compared to \$6.96 billion in the year-earlier quarter, according to data from Benzinga Pro.

Fresh off its acquisition of a manufacturing facility from Nexus Pharmaceuticals, some investors may be eyeing potential gains from the company's dividends. Eli Lilly currently offers an annual dividend yield of 0.71%, which is a quarterly dividend amount of \$1.30 per share (\$5.20 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 approximately \$846,471 or around 1,154 shares. For a more modest \$100 per month or \$1,200 per year, you would need \$169,441 or around 231 shares.

Read This: Investor Optimism Improves Following Earnings Reports; US Stocks Notch Weekly Gains

To calculate: Divide the desired annual income (\$6,000 or \$1,200) by the dividend (\$5.20 in this case). So, \$6,000 / \$5.20 = 1,154 (\$500 per month), and \$1,200 / \$5.20 = 231 shares (\$100 per month).

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price 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 is currently priced at \$50, the dividend yield would be 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 the dividend payment can impact the 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, so will the yield.

LLY Price Action: Shares of Eli Lilly rose 1.2% to close at \$733.51 on Friday.

Read More: Domino’s Pizza, Yum China And 3 Stocks To Watch Heading Into Monday

Image: Shutterstock