Nvidia Corporation (NASDAQ: NVDA) stock rose and settled on Wednesday after Donald Trump was elected as the 47th president of the United States.
Citing national security threats, the Biden administration has imposed an artificial intelligence technology embargo on China, restricting China’s access to Nvidia’s advanced AI chips.
With all the buzz surrounding Nvidia recently ahead of its quarterly results, some investors may also be looking at the company’s potential dividend payoff. Currently, Nvidia’s annual dividend yield is 0.03%. This is a quarterly dividend of 1 cent per share (4 cents per year).
To understand how to make $500 per month from Nvidia, start with an annual goal of $6,000 ($500 x 12 months).
Then divide this amount by Nvidia’s 4 cent dividend: $6,000 / $0.04 = 150,000 shares.
Therefore, for an investor to earn $500 in monthly dividend income, they would need to own approximately $21,841,500 worth of Nvidia, or 150,000 shares.
Do the same calculations assuming a more modest goal of $100 per month ($1,200 per year). To generate $100 of monthly dividend income, $1,200 / $0.04 = 30,000 shares, or $4,368,300.
Keep in mind that dividend yields can change periodically, as dividends and stock prices fluctuate over time.
Dividend yield is calculated by dividing the annual dividend by the current stock price. As the stock price fluctuates, the dividend yield will also fluctuate.
For example, if a stock pays an annual dividend of $2 and the current price is $50, the dividend yield is 4%. 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 increases to 5% ($2/$40).
Additionally, the dividends themselves can change over time. That can also affect dividend yields. If a company increases its dividend, the dividend yield will increase even if the stock price remains the same. Similarly, when a company reduces its dividend payments, its dividend yield also falls.
NVDA Stock Price Action: Nvidia stock rose 4.1% to close at $145.61 on Wednesday.
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This article is the first on how to make $500 a month from Nvidia stock after Trump wins.
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