Here's how to make $500 a month on Nvidia stock after Trump's victory

Shares of Nvidia Corporation (NASDAQ:NVDA) settled higher on Wednesday afterward Donald Trump won the election as the 47th US President.

The Biden administration imposed an artificial intelligence embargo on China and restricted the country's access to advanced AI chips from Nvidia, citing national security threats.

Given the recent enthusiasm for Nvidia ahead of its quarterly results, some investors may also be paying attention to potential gains from the company's dividends. Nvidia currently offers an annual dividend yield of 0.03%. This equates to a quarterly dividend amount of 1 cent per share (4 cents per year).

To find out how you can make $500 a month with Nvidia, let's start with the annual goal of $6,000 ($500 x 12 months).

Next, we divide this amount by Nvidia's 4 cent dividend: $6,000 / $0.04 = 150,000 shares.

So an investor would need to own about $21,841,500 worth of Nvidia, or 150,000 shares, to earn $500 in monthly dividend income.

Assuming a more conservative goal of $100 per month ($1,200 per year), we do the same calculation: $1,200 / $0.04 = 30,000 shares or $4,368,300, to earn a monthly dividend income of $100.

Note that the dividend yield can change continuously as both the dividend payment and the share price fluctuate over time.

The dividend yield is calculated by dividing the annual dividend payment by the current share price. When the stock price changes, the dividend yield also changes.

For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield is 4%. However, if the stock price rises to $60, the dividend yield would decrease to 3.33% ($2/$60).

Conversely, if the stock price falls to $40, the dividend yield would increase to 5% ($2/$40).

Additionally, the dividend payment itself can also change over time. This can also affect the dividend yield. If a company increases its dividend payout, the dividend yield increases even if the share price remains the same. Likewise, if a company lowers its dividend payment, the dividend yield decreases.

NVDA price action: Shares of Nvidia rose 4.1% to close at $145.61 on Wednesday.

Read more:

Image: Shutterstock

“The Active Investor’s Secret Weapon” Level up your stock market game with the #1 trading tool for “news and everything else”: Benzinga Pro – Click here to start your 14-day trial now!

Get the latest stock analysis from Benzinga?

This article, “How to Make $500 a Month With Nvidia Stock After Trump Wins,” originally appeared on Benzinga.com

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.