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Dividend investing is back in the spotlight as investors prepare for a scenario of higher and longer interest rates amid high inflation and volatility. Why do investors flock to dividend stocks when interest rates are high? An analysis by Global
In this environment, investors look for large companies with strong dividend growth records and balance sheets. ExxonMobil Corp (NYSE:XOM), with 41 consecutive years of dividend increases, is one of the most popular dividend stocks among income investors. In this article we will learn how to make at least $500 per month with ExxonMobil, but first let’s take a look at the latest rumors surrounding the stock.
ExxonMobil shares are up about 10% so far this year. Goldman Sachs recently included the stock in its list of companies with high liquidity. The company noted that investors are willing to pay a premium for stocks with solid liquidity because of their low trading costs and the “flexibility” they offer in different environments. Last month, Morgan Stanley started covering the stock with an Overweight rating and a $145 price target. Morgan Stanley analyst Devin McDermott noted that the shares are trading at a 55% discount to the broader market, despite cash flow per share growth of 50% above the S&P.
How much should I invest in XOM to earn $500 per month in dividends?
Exxon Mobil Corp currently pays a quarterly dividend of $0.95 per share or an annual dividend of $3.80 per share. The stock closed the June 7 trading session at $112.75.
A $500 dividend income from ExxonMobil would mean you would earn $6,000 per year. To find the number of shares you need to own to achieve this income, we divide this annual income by ExxonMobil’s annual dividend per share.
Number of shares required= $6000/$3.80 = 1578.94
The total investment needed to earn $500 per month with XOM: 1579 shares X $112.75 (the price per share of XOM)
= $178,032
To earn $500 monthly with ExxonMobil, you would need to own 1,579 shares of XOM based on the June 7 closing price. That would be a total investment of approx $178,032.
What about $100 a month?
Let’s revise our goal to just $100 per month in dividend income and calculate the required investment amount.
An income of $100 per month means $1200 per year.
Let’s calculate the total number of XOM shares you need to buy to earn $100 per month:
$1200/$3.80 = 315,789 shares.
That means if you want to earn $100 a month in dividends from ExxonMobil, you’d have to buy about 316 shares of the company, which would cost you a lot of money. $35,629.
ExxonMobil Dividend Analysis
Over the past five years, ExxonMobil’s annual dividend growth has been 2.20% per year. At the end of the first quarter, the stock’s payout ratio stands at 46%, much lower than the industry average of 66%. During the first quarter, the company generated $14.7 billion in cash flow from operations, while free cash flow in the first quarter was $10.1 billion. The company paid $3.8 billion in dividends and conducted $3.0 billion in stock buybacks. The average price target of Wall Street analysts for XOM is $132.88, which offers approximately 17% upside potential from the June 7 closing price.
Are you missing out on higher returns?
The current high interest rate environment has created an incredible opportunity for income-seeking investors to earn huge returns, but not through dividend stocks… Certain private market real estate investments offer retail investors the opportunity to take advantage of these high-yield investments. possibilities and Benzinga has identified some of the most attractive options for you.
For example, the Jeff Bezos-backed investment platform just launched its own investment platform Private credit fund, which provides access to a pool of short-term loans backed by residential real estate, with a net annual return of 7% to 9% paid out monthly to investors. The best part? Unlike other private credit funds, this one has a minimum investment of just $100.
Cameron Wu, VP Investments at Arrivald, explains the new Private Credit Fund
Don’t miss this opportunity to take advantage of high-yield investments while interest rates are high. See Benzinga’s favorite high-yield deals.
This article, Here’s How Many Shares Of Exxon Mobil Corp You Would Need To Earn $500 A Month In Dividends originally appeared on Benzinga.com
