How To Earn $1,000 Per Month From IBM Stock

International Business Machines Corporation +0.06%

International Business Machines Corporation

IBM

181.58

+0.06%

International Business Machines Corp. (NYSE:IBM) closed at $162.23 at the end of the trading session on Dec. 15. 

In the last week of October, IBM filed Form 10-Q for the quarter ending Sept. 30. IBM's total cash dividend payments for the first three quarters of 2023 were $4.5 billion. The third-quarter cash dividends were $1.66 per share and a cumulative $4.97 per share for the nine months ending Sept. 30. 

The annualized dividend for IBM is $6.63 (using $4.97 per share for the first three quarters of 2023). Based on the price on Dec. 15, the stock's dividend yield is 4.08%

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How Can You Earn $1,000 Per Month As An IBM Investor?

If you want to make $1,000 per month or $12,000 annually from IBM's dividends, you need to invest close to $294,118 for 1,813 shares at $162.23 each. If you want to earn $200 per month, your investment value drops to $58,824 or 363 shares.

Determining the estimated value of investments through dividend yields: You can use two key variables to estimate an approximate investment value. The first is your desired annual income — $12,000 or $2,400 — and the second is the stock's dividend yield, which is 4.08% in this case. So, $12,000 / 0.0408 = $294,118 to generate an income of $1,000 per month, and $2,400 / 0.0408 = $58,824 for $200 per month.

You can calculate the dividend yield by dividing the annual dividend payments by the stock’s current price. Because the dividend yield calculation relies on the company's stock price and the dividend policies of the company, it can change on a rolling basis. 

For instance, assume a stock that pays $2 as an annual dividend is priced at $50. Its dividend yield would be $2 / $50 = 4%. If the stock price rises to $60, the dividend yield drops to 3.33% ($2 / $60). A drop in stock price to $40 will have an inverse effect and increase the dividend yield to 5% ($2 / $40).

Just like a change in stock price affects the yield, changes in the dividend payment can also impact the yield. Assuming the stock price remains the same, the dividend yield will increase when the company increases the dividend value and vice versa.

Disclaimer: This calculation is according to the price per share on Dec. 15 using an annualized dividend. The price of IBM stock at the end of trading hours on Dec. 19 was $161.56

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