Paychex, Inc. (NASDAQ:PAYX) will release its fourth-quarter earnings report before the opening bell on Wednesday, June 24.

Analysts expect the company to report quarterly earnings of $1.31 per share, up from $1.19 per share in the year-ago period. The consensus estimate for Paychex’s quarterly revenue is $1.61 billion. It reported $1.43 billion last year, according to Benzinga Pro.

Ahead of quarterly earnings, Stifel analyst David Grossman maintained a Hold rating on Paychex on June 17 and raised the price target from $105 to $110.

With the recent buzz around Paychex, some investors may be eyeing potential gains from the company’s dividends too. As of now, Paychex has an annual dividend yield of 4.85%, which is a quarterly dividend amount of $1.19 per share ($4.76 a year).  

So, how can investors use its dividend yield to pocket a regular $500 per month?

To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $123,881 or around 1,261 shares. For a more modest $100 per month or $1,200 per year, you would need $24,756 or around 252 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($4.76 in this case). So, $6,000 / $4.76 = 1,261 ($500 per month), and $1,200 / $4.76 = 252 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.

PAYX Price Action: Shares of Paychex gained 0.7% to close at $98.24 on Thursday.

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