Ross Stores Q2 Earnings Preview: $791K Investment Yields $6,000 Annual Dividends

Ross Stores, Inc. is set to release its second-quarter earnings after the market close on Thursday, August 20, Eastern Time.

Analysts expect the company to report quarterly earnings of $1.94 per share, up from $1.56 per share in the same period last year. The consensus estimate for ROST's quarterly revenue stands at $6.15 billion, compared to $5.53 billion in the year-ago period.

Ahead of the quarterly results, Evercore ISI Group analyst Michael Binetti maintained an Outperform rating on Ross Stores on August 17 and raised the price target from $265 to $276.

With recent buzz surrounding Ross Stores, some investors may also be eyeing potential gains from the company's dividends. Currently, Ross Stores offers an annual dividend yield of 0.76%, with a quarterly dividend of 44.5 cents per share.

So, how can investors use its dividend yield to steadily generate $500 per month?

To earn $500 per month or $6,000 annually from dividends, you would need to invest approximately $791,140, or about 3,371 shares. For a more modest target of $100 per month or $1,200 annually, you would need $158,181, or about 674 shares.

Calculation method: Divide the desired annual income by the dividend. Thus, $6,000 / $1.78 = 3,371 shares, and $1,200 / $1.78 = 674 shares.

It's important to note that dividend yields can change over time, as both dividend payments and stock prices fluctuate.

How It Works

The dividend yield is calculated by dividing the annual dividend payment by the stock's current price.

For example, if a stock pays an annual dividend of $2 and its current price is $50, the dividend yield is 4%. However, if the stock price rises to $60, the yield drops to 3.33%. Conversely, if the price falls to $40, the yield increases to 5%.

Similarly, changes in dividend payments affect the yield. If a company increases its dividend, the yield rises, provided the stock price remains unchanged. Conversely, if dividend payments decrease, the yield falls.

ROST Stock Performance

Ross Stores shares fell 0.7% on Wednesday, closing at $234.69.