When Costco Wholesale Corporation COST releases earnings for the fourth quarter after the closing bell on Thursday, analysts expect the bulk retailer to report quarterly earnings at $5.08 per share.

That’s up from $4.86 per share a year ago. Costco projects to report revenue of $79.97 billion, compared to $78.94 billion a year earlier, according to Benzinga Pro.

On Sept. 24, Truist Securities analyst Scot Ciccarelli downgraded the Issaquah, Washington-based company from Buy to Hold and maintained the price target of $873.

With the recent buzz around Costco, some investors may be eyeing potential gains from the company’s dividends. As of now, Costco has a dividend yield of 0.51%. That’s a quarterly dividend amount of $1.16 a share ($4.64 a year).

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

Next, we take this amount and divide it by Costco’s $4.64 dividend: $6,000 / $4.64 = 1,293 shares

An investor would need to own approximately $1,174,587 worth of Costco, or 150,000 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 / $4.64 = 259 shares, or $235,281 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis. 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.

COST Price Action: Shares of Costco gained 0.8% to close at $908.42 on Wednesday.

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Image: Flickr/Mike Mozart