How To Earn $500 A Month From Signet Jewelers Stock Ahead Of Q2 Earnings

Signet Jewelers Limited (NYSE:SIG) will release earnings results for the second quarter, before the opening bell on Tuesday, Sept. 2.

Analysts expect the diamond jewelry retailer to report quarterly earnings at $1.24 per share, down from $1.25 per share in the year-ago period. Signet Jewelers projects to report quarterly revenue of $1.5 billion, compared to $1.49 billion a year earlier, according to data from Benzinga Pro.

Some investors may be eyeing potential gains from Signet's dividends. Currently, the company offers an annual dividend yield of 1.42%, which is a semi-annual dividend amount of 32 cents per share ($1.28 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 $421,264 or around 4,688 shares. For a more modest $100 per month or $1,200 per year, you would need $84,289 or around 938 shares.

To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.28 in this case). So, $6,000 / $1.28 = 4,688 ($500 per month), and $1,200 / $1.28 = 938 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.

SIG Price Action: Shares of Signet Jewelers fell 3.8% to close at $89.86 on Thursday.

On Aug. 26, Telsey Advisory Group analyst Dana Telsey maintained Signet with a Market Perform rating and maintained a $92 price target.

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