It's not quite regarded as the go-to dividend stock as it used to be. Nevertheless, with a forward-looking yield of 2.5% based on a dividend that's not only been paid like clockwork for decades now but has been raised every year for the past 43 consecutive years, energy name ExxonMobil's (XOM -3.20%) still got plenty of dividend mojo left.
NYSE: XOM
Key Data Points
And this begs the question: How much Exxon would you need to own to generate, say, $250 per month in dividend income?
OK, you can't quite do that, since ExxonMobil's dividends are paid on a quarterly basis. Assuming you can split a $750 quarterly payment into three equal chunks of $250 each, how much of an investment would be needed to earn $750?
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It's not difficult to figure out. With a forward-looking dividend yield of 2.5% based on an assumed quarterly payment of $1.03 per share, a little over 728 shares would do the trick. If you were buying in at today's prices, that would cost you just over $118,000.
That's not chump change. Given the amount of money being considered, it wouldn't be wrong to consider other income-producing options, including longer-term U.S. Treasuries that are now yielding on the order of 5%.
Just keep all the relevant details in mind, like how like how long you need this investment to generate income. Treasury yields are nice right now, but you'd be locking in a payment that doesn't grow over time. Dividend stocks like ExxonMobil may start you out with a lower yield, but the quality names will grow their dividend payments as time marches forward.
