How To Earn $500 A Month From American Express Stock Ahead Of Q1 Earnings

American Express Company (NYSE:AXP) will release earnings for its first quarter before the opening bell on Thursday, April 23.

Analysts expect the company to report quarterly earnings of $3.99 per share. That’s up from $3.64 per share in the year-ago period. The consensus estimate for American Express quarterly revenue is $18.61 billion (it reported $16.97 billion last year), according to Benzinga Pro.

Ahead of quarterly earnings, a Morgan Stanley analyst on April 16 maintained American Express at an Equal-Weight rating and cut the price target from $395 to $385.

With the recent buzz around American Express, some investors may be eyeing potential gains from the company's dividends too. As of now, American Express has an annual dividend yield of 1.15%, which is a quarterly dividend amount of 95 cents per share ($3.80 a year).

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

Next, we take this amount and divide it by AXP's $3.80 dividend: $6,000 / $3.80 = 1,579 shares.

So, an investor would need to own approximately $520,738 worth of American Express, or 1,579 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 / $3.80 = 316 shares, or $104,214 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 decreases its dividend payment, the dividend yield will decrease.

AXP Price Action: Shares of American Express slipped to $329.79 on Tuesday.

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