Here's how to make $500 a month on Morgan Stanley stocks ahead of third-quarter results

Morgan Stanley (NYSE:MS) will report third quarter earnings results before the opening bell on Wednesday, October 16th.

Analysts expect the New York-based company to report quarterly profit of $1.58 per share, up from $1.38 per share in the year-ago period. According to data from Benzinga Pro, Morgan Stanley expects revenue of $14.41 billion for the latest quarter.

Big banks like JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and BlackRock (NYSE:BLK) delivered results that beat analysts' forecasts and set a positive tone for the broader market.

Given the recent excitement surrounding Morgan Stanley, some investors may also be paying attention to potential gains from the company's dividends. Currently, Morgan Stanley offers an annual dividend yield of 3.3%, which translates to a quarterly dividend amount of 92.5 cents per share ($3.70 per year).

So how can investors use dividend yield to consistently rake in $500 a month?

To earn $500 per month or $6,000 per year from dividends alone, you would need to invest about $182,118, or about 1,622 shares. For a more modest $100 per month or $1,200 per year, you would need $36,379, or about 324 shares.

For calculation: Divide the desired annual income ($6,000 or $1,200) by the dividend (in this case, $3.70). So: $6,000 / $3.70 = 1,622 ($500 per month) and $1,200 / $3.70 = 324 shares ($100 per month).

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

This is how it works: The dividend yield is calculated by dividing the annual dividend payment by the current price of the stock.

For example, if a stock pays an annual dividend of $2 and is currently trading at $50, the dividend yield is 4% ($2/$50). However, if the stock price rises to $60, the dividend yield drops to 3.33% ($2/$60). On the other hand, if the stock price falls to $40, the dividend yield increases to 5% ($2/$40).

Changes in dividend payments can also affect returns. When a company increases its dividend, the yield also increases as long as the share price remains the same. Conversely, if the dividend payment falls, the yield also falls.

MS price promotion: Shares of Morgan Stanley rose 1.7% to close at $112.28 on Monday.

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This article, “How to Make $500 a Month in Morgan Stanley Stock Ahead of Third Quarter Earnings” originally appeared on Benzinga.com

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