Are you looking to earn some extra income just by owning stocks? Dividend-paying stocks can be a great way to do that! Hydro One (TSX:H), a large electricity company in Ontario, pays regular dividends. This makes it a pretty appealing option if you’re looking for a steady income stream. So, if your goal is to make $2,000 each year from Hydro One’s dividends, let’s figure out how many shares you’d need to own and how much that investment might cost.
How much does it take?
As of writing, Hydro One’s stock price is sitting at $49.37 per share. The dividend stock pays out a dividend of about $0.32 per share every three months. If you add that up over a whole year, that comes to about $1.26 in dividends per share annually. Now, to figure out how many shares you’d need to hit that $2,000 yearly dividend goal, we just do a little math.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| H | $49.37 | 1,588 | $1.26 | $2,000.88 | quarterly | $78,399.56 |
Therefore, you’d be looking at an investment of about $78,399.56 to acquire those 1,588 shares at the current stock price. That’s a fair chunk of change!
Is it worth it?
Hydro One has a pretty good history of paying out dividends consistently. Looking at how the dividend stock has been doing financially, things seem pretty solid. In that same report, Hydro One said its earnings per share were $0.33, which is up from the $0.30 it made during the same period the year before. It also managed to save $150 million by being more efficient and even finished some big infrastructure projects ahead of schedule and under budget. That’s always a good sign!
While Hydro One’s dividend yield is around 2.60%, which isn’t super high compared to some other utility companies, the fact that it’s financially stable and has a consistent dividend history makes it a reliable choice for investors who are focused on getting a steady income.
However, just like with any investment, putting a significant amount of money into a single stock comes with risks. Things can happen in the market or with the company itself that could affect the stock price or even the dividend payments. That’s why it’s always a good idea to spread your investments around in different companies and industries. This helps protect you if one investment doesn’t do as well as you hoped. It’s also a smart move to chat with a financial advisor to make sure an investment like this fits in with your overall financial goals and how much risk you’re comfortable taking.
Bottom line
So, to aim for $2,000 in annual dividends from Hydro One at the current rate, you’d need to invest about $78,399.56 to buy around 1,588 shares. While this does require a pretty substantial investment, Hydro One’s consistent dividend payments and solid financial performance make it a noteworthy option if you’re looking for a steady income stream from your investments. Just remember to do your homework and consider the bigger picture of your investment strategy!
