How To Earn $1,000 Per Month From Microsoft Stock

At the end of trading hours on March 7, Microsoft Corp. (NASDAQ:MSFT) stood at $409.14. In the preceding 52 weeks, the stock price fluctuated between a high of $420.82 and a low of $245.73.

The American multinational technology company currently pays a quarterly dividend of $0.75 per share, equating to an annualized dividend of $3.00 per share and giving its stock a yield of approximately 0.73% based on its closing price on March 7.

How Can You Earn $1,000 Per Month As A Microsoft Investor?
Assuming that your earnings target is $1,000 per month or $12,000 annually from Microsoft's dividends, your estimated investment value would be around $1,643,836 which is about 4,018 shares at $409.14 each.Determining the value of investments using dividend yields: To calculate your estimated investment value you need two variables — your desired annual earnings target — $12,000 — and the dividend yield of the stock, which is 0.73% in this case. So, $12,000 / 0.0073 = $1,643,835.62 to generate an income of $1,000 per month.

You can calculate a stock’s dividend yield by dividing its annual dividend payments by the current price of the stock. The dividend yield is not fixed and may change on a rolling basis. This is because of the movements in its stock prices or changes in the company's dividend policies.

Assuming the stock price remains unchanged, its dividend yield tends to increase when the company's dividend value rises and vice versa. This shows the positive correlation between the dividend yield of a stock and the value of the dividend payouts.

For instance, assume a stock that pays $2 as an annual dividend is priced at $50. Its dividend yield would be $2 / $50 = 4%. If the stock price rises to $60, the dividend yield drops to 3.33% ($2 / $60). A drop in stock price to $40 will have an inverse effect and increase the dividend yield to 5% ($2 / $40).

Disclaimer: This calculation is according to the price per share on March 7 using an annualized dividend. The price of Microsoft stock at the end of trading on March 7 was $409.14.