Broadcom Inc. (NASDAQ:AVGO) will release earnings for its third quarter after the closing bell on Wednesday, Sept. 2.

Analysts expect the Palo Alto, California-based company to report quarterly earnings of $3.24 per share. That’s up sharply from $1.69 per share in the year-ago period. The consensus estimate for Broadcom’s quarterly revenue is $29.43 billion. It reported $15.95 billion last year, according to Benzinga Pro.

Some Broadcom investors may be eyeing potential dividend gains. Currently, the company has an annual dividend yield of 0.70%, with a quarterly dividend of 65 cents per share ($2.60 per year).

To figure out how to earn $500 monthly from Broadcom, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we divide this amount by AVGO’s $2.60 dividend: $6,000 / $2.60 = 2,308 shares.

So, an investor would need to own approximately $854,745 worth of Broadcom, or 2,308 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $2.60 = 462 shares, or $171,097 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.

For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).

Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).

Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company reduces its dividend payments, its dividend yield will decline.

Price Action, Analyst Take

Shares of Broadcom rose by 0.4% to close at $370.34 on Monday.

RBC Capital analyst Srini Pajjuri reiterated a Sector Perform rating on Broadcom on Aug. 26 and maintained a $400 price target.

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