As fashion company Tapestry, Inc. (NYSE:TPR) prepares to release fourth-quarter earnings before the opening bell on Thursday, Aug. 13, investors may be eyeing potential gains from the company’s dividends.

Currently, Tapestry has an annual dividend yield of 0.97%, which is a quarterly dividend amount of 40 cents per share ($1.60 a year).

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

Next, we take this amount and divide it by TPR’s $1.60 dividend: $6,000 / $1.60 = 3,750 shares.

So, an investor would need to own approximately $617,925 worth of Tapestry, or 3,750 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 / $1.60 = 750 shares, or $123,585 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis, as the dividend payment and the 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.

TPR Price Action

Shares of Tapestry gained by 1.5% to close at $164.78 on Monday.

Analysts expect the New York-based company to report quarterly earnings of $1.28 per share, up from $1.04 per share in the year-ago period. The consensus estimate for Tapestry’s quarterly revenue is $1.87 billion. It reported $1.72 billion last year, according to Benzinga Pro.

Telsey Advisory Group analyst Dana Telsey maintained Tapestry with an Outperform rating on Aug. 6 and raised the price target from $160 to $175.

Tapestry owns high-end brands, including Coach and Kate Spade.

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