Apple has been a tremendous long-term investment. The tech giant is up by roughly 30% year-to-date and has more than tripled over the past five years. While capital gains are a major selling point for the asset, you can also earn quarterly dividends just from holding onto your shares.
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If you put a lot of money into Apple stock, it’s possible to earn $100 per month without doing any extra work. This guide will reveal how many Apple shares you need and how dividend payments compound.
Apple currently pays a quarterly dividend of $0.25 per share, which comes to an annualized dividend of $1 per year. Apple raised its quarterly dividend by 4.2% earlier this year, and compounding gives your shares a boost, too.
Granted, most of the profit will come from your investing in more shares. However, an investor who currently makes $96 per month from Apple will make $100 per month the following year, even if they do not buy another Apple share. That’s the power of the dividend growth rate and quarterly dividend reinvestments.
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It’s best to start by viewing how much you need to earn from Apple shares each year to hit the per-month target. For instance, earning $100 per month from Apple stock means earning $1,200 per year. Using the annualized dividend of $1 per share, you would need 1,200 Apple shares to earn that $1,200 per year, or $100 per month.
You wouldn’t receive this payment each month. Instead, you would receive a dividend payment every quarter. You can reinvest the dividend into more Apple shares to increase your next payout or receive the cash. Apple distributes dividends in February, May, August and November. The company declares its dividends roughly two weeks before distributing them to investors.
You need 1,200 Apple shares to earn $100 per month from dividends. At the current price of roughly $250 per share, you would have to invest $300,000. You don’t have to make the full investment right away — investors can gradually build up until they have 1,200 shares, and Apple’s dividend growth plus reinvestments will help you reach the goal sooner.
However, if your main goal is to make $100 each month from dividend stocks, Apple isn’t the best choice. Apple only has a 0.40% yield, which means you have to buy more shares to reach the same dividend income. It’s much easier to make $100 per month in dividends with Cisco, for example, which currently yields 2.73%. However, Cisco has lagged the stock market for several years, and Apple’s total returns comfortably exceed Cisco.
