How To Earn $500 A Month From KB Home Stock Ahead Of Q3 Earnings

KB Home (NYSE:KBH) will release earnings results for the third quarter, after the closing bell on Wednesday, Sept. 24.

Analysts expect the company to report quarterly earnings at $1.51 per share, down from $2.04 per share in the year-ago period. KB Home projects to report quarterly revenue at $1.59 billion. It reported $1.75 billion a year earlier, according to data from Benzinga Pro.

With the recent buzz around KB Home, some investors may be eyeing potential gains from the company's dividends too. As of now, KB Home offers an annual dividend yield of 1.49%. That’s a quarterly dividend amount of 25 cents per share ($1.00 a year).

To figure out how to earn $500 monthly from KB Home, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by KB Home's $1.00 dividend: $6,000 / $1.00 = 6,000 shares.

So, an investor would need to own approximately $383,640 worth of KB Home, or 6,000 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $1.00 = 1,200 shares, or $76,728 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis (the payment and stock price both fluctuate over time).

The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.

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

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

Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.

KBH Price Action: Shares of KB Home fell by 1.7% to close at $63.94 on Friday.

On Sept. 18, BofA Securities analyst Rafe Jadrosich maintained KB Home with a Neutral and raised the price target from $60 to $67.

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