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As PriceSmart, Inc. (NASDAQ:PSMT) gears up to unveil its third-quarter earnings on Thursday, all eyes are on the company’s ability to not only meet but exceed expectations, potentially reshaping investor sentiment and dividend strategies.
Analysts expect the company to report quarterly earnings at $1.09 per share, up from $1.08 per share in the year-ago period. PriceSmart is projected to report quarterly revenue of $1.31 billion, compared to $1.23 billion a year earlier, according to data from Benzinga Pro.
On May 9, PriceSmart named Gualberto Hernandez as Executive Vice President and CFO.
With the recent buzz around PriceSmart, some investors may also be eyeing potential gains from the company's dividends. As of now, PriceSmart offers an annual dividend yield of 1.21%, which is a semi-annual dividend amount of 63 cents per share ($1.26 a year).
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 $496,391 or around 4,762 shares. For a more modest $100 per month or $1,200 per year, you would need $99,236 or around 952 shares.
To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.26 in this case). So, $6,000 / $1.26 = 4,762 ($500 per month), and $1,200 / $1.26 = 952 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.
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.
PSMT Price Action: Shares of PriceSmart fell 1.1% to close at $104.24 on Tuesday.
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Posted In: PSMT
