The Wendy’s Company (NASDAQ:WEN) will release its second-quarter earnings report before the opening bell on Friday, Aug. 7.
Analysts expect the company to report quarterly earnings of 16 cents per share, down from 29 cents per share in the year-ago period. The consensus estimate for Wendy’s quarterly revenue is $557.73 million. It reported $560.93 million last year, according to Benzinga Pro.
Citigroup analyst Jon Tower, on July 28, maintained Wendy’s with a Neutral and cut the price target from $7.75 to $7.25.
With the recent buzz around Wendy’s, some investors may be eyeing potential gains from the company’s dividends too. As of now, Wendy’s has an annual dividend yield of 7.01%, which is a quarterly dividend amount of 14 cents per share (56 cents a year).
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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 $85,605 or around 10,714 shares. For a more modest $100 per month or $1,200 per year, you would need $17,123 or around 2,143 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.56 in this case). So, $6,000 / $0.56 = 10,714 ($500 per month), and $1,200 / $0.56 = 2,143 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.
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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.
WEN Price Action: Shares of Wendy’s gained 3.9% to close at $7.99 on Wednesday.
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