Investors in The Kroger Co. (NYSE:KR) may be eyeing potential gains from the company's dividends ahead of its first quarter earnings report on Thursday, June 18.

Currently, the supermarket company has an annual dividend yield of 2.18%, with a quarterly dividend amount of 35 cents per share ($1.40 a year).

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

Next, divide this amount by Kroger's $1.40 dividend: $6,000 / $1.40 = 4,286 shares.

So, an investor would need to own approximately $274,818 worth of Kroger, or 4,286 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 per month ($1,200 annually), we do the same calculation: $1,200 / $1.40 = 857 shares, or $54,951 in total, to generate a monthly dividend income of $100.

Note that the dividend yield can change on a rolling basis; both the dividend payment and the stock price 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.

Price Action

Shares of Kroger fell by 0.5% to close at $64.12 on Thursday.

Analysts expect the Cincinnati, Ohio-based grocer to report quarterly earnings of $1.59 per share, up from $1.49 per share in the year-ago period. The consensus estimate for Kroger's quarterly revenue is $45.49 billion. It reported $45.12 billion last year, according to Benzinga Pro.

Ahead of quarterly earnings, JPMorgan analyst Thomas Palmer, on Thursday, maintained Kroger with a Neutral and lowered the price target from $72 to $70.

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