Does one stock really pay $1,000 a month in dividends? You can do it with Exxon Mobil Corporation, which has one of the best income yields on the market.
Exxon Mobil’s stock price dropped 7% so far this year and ended the day at $99.20 on December 13. However, the oil giant still has a good dividend return of 3.63% for investors who want to make money.
You could make $1,000 a month in dividends if you invested about $330,000 in Exxon Mobil stock.
Exxon Mobil Remains Highly Profitable Despite Headwinds
Exxon Mobil is the biggest oil and gas company in the world that is sold on the stock market. It looks for and makes crude oil and natural gas all over the world.
Even though there are worries about peak oil demand, Exxon keeps making money and giving bonuses. The company Exxon made $19.7 billion in the third quarter of 2022. Profits added up to $55.7 billion in the first nine months of 2022.
With a strong cash flow of over $65 billion, the company was able to pay bonuses and pay down debt. Since 1910, Exxon has consistently given out profits for more than a hundred years.
Attractive 3.63% Dividend Yield
For the past 40 years, Exxon Mobil has raised its bonus every year. The present dividend is $0.91 per share, which adds up to $3.64 per year.
With the stock price being close to $100 right now, this is a very good dividend yield of 3.63%, which is more than three times the average for the S&P 500.
With such a high yield, Exxon only needs to spend about $330,000 to get $1,000 a month in dividends.
Of course, the payout yield changes along with the price of the stock. But the fact that Exxon has a long history of increasing dividends gives income investors trust.
Oil Prices Support Cash Flow and Dividends
The price of oil has a big effect on Exxon’s earnings and dividends. Concerns about global availability have kept the price of oil at around $70 per barrel all through 2022. Prices that are high have helped Exxon’s cash flow.
If a slump lowers the need for energy, oil prices might go down. But Exxon still makes enough money to pay its dividend even when oil costs $50 a barrel. Even though Exxon didn’t make much money during the 2020 oil crash, it kept its payout.
It looks like Exxon will get paid. But if the price of oil stays low for a long time, the reward might have to be cut to protect the balance sheet.
For now, though, the clouds look very far away. The oil market is likely to stay tight as long as people don’t spend enough in the industry. Demand for energy is going up in big countries like China and India. So it looks like Exxon will keep paying off.
Invest $330,000 for $1,000 Monthly Income
Going back to the question we started with, how much Exxon Mobil stock do you need to earn $1,000 a month in dividends?
With the stock price at $99 and a dividend yield of 3.63%, you would need to buy about 3,333 shares, which is about $330,000.
Here is the math:
- Annual dividend per share: $3.64
- Monthly dividend per share: $0.3033
- Shares needed for $1,000 monthly income = 1,000 / $0.3033 = 3,333
- With Exxon at $99 per share, 3,333 shares equals $329,667
In other words, if you put about $330,000 into Exxon stock, you could get $1,000 a month or $12,000.
Of course, this costs a lot of money up front. But it does let you make passive cash all the time. While you get your earnings, Exxon’s management team takes care of the day-to-day operations.
Dividend Investing Considerations
Before investing over $300,000 into Exxon Mobil stock purely for its dividend, consider a few key points:
- Stock prices fluctuate – Exxon’s dividend yield moves opposite to the share price. The above math assumes Exxon’s stock stays around $100.
- Companies can cut dividends if profits decline – Exxon’s payout looks safe for now but oil’s boom/bust cycles carry dividend risk.
- Diversification reduces risks – Rather than putting $330,000 into one stock, consider spreading across multiple dividend payers.
Even with these warnings, Exxon Mobil stands out because it offers both income and the chance to make money on stock gains. With big new oil and gas projects, the company thinks it will double its profits by 2027.
So Exxon offers a unique mix of present income generation and growth potential for the future. People who want to make money should look closely at XOM.
To get $1,000 a month in earnings, you need a lot of money. But it is possible to if you put about $330,000 into Exxon Mobil stock. For buyers who want a lot of passive income, Exxon is a good choice.