Want $1,000 in Dividend Income? Here's How Much You Have to Invest in Walmart Stock
So you're looking to collect $1,000 in dividend income from Walmart (NYSE: WMT). That's great -- dividend income is especially sweet because you don't have to do much to get it -- just own the dividend-paying stock. It's passive income -- arriving regularly in your investment account whether you're noticing it or not.
Let's look at how much you'd have to invest in Walmart stock in order to collect $1,000 in a year. The calculations we'll go through can help you figure out how much you'd need to invest in other stocks, too.
Image source: Getty Images.
All about dividends
First, a dividend primer. Dividends are generally dollars paid to shareholders by a company from earnings that are not needed for other purposes. (So fast-growing companies that need to reinvest every dollar in growth typically won't pay dividends, but once they're generating more money than they have good uses for, they may initiate a payout.)
Walmart is currently paying out $0.2075 per share per quarter, or $0.83 on an annual basis. (Its recent dividend yield, the annual dividend amount divided by its current stock price, is 1.24% -- $0.83 divided by the recent share price of $66.73.)
Getting $1,000 from Walmart's dividend
On to that dividend income. Take your desired dividend income, $1,000, and divide it by the dividend per share offered by Walmart. So that's $1,000 divided by $0.83, which is 1,205. That's the number of shares you'd need to own to generate $1,000 in a year. And here's what it would cost you to buy those shares: 1,205 times $66.73: $80,410.
That may be too much for you, so you might want to look for bigger dividend payers that can net you $1,000 with a smaller investment. It's also smart to never buy any stock just for the dividend. Make sure it's a good investment without the dividend. Walmart, for example, doesn't look like a screaming bargain at recent price levels, but it also seems to have a promising future.Should you invest $1,000 in Walmart right now?
Before you buy stock in Walmart, consider this:
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*Stock Advisor returns as of June 10, 2024Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.
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