Investors are always searching for the Best Stock to add to their portfolio whether for long-term growth or steady passive income.
With the spotlight on Macys stock ahead of its Q2 earnings report, many are wondering how this retailer can help them earn money from stocks through dividends.
Let’s break down the details and see whether Macy’s can be a strong candidate for income-focused investors.
Earnings Outlook for Macy’s
Macy’s, Inc. (NYSE:M) released its second-quarter earnings on Wednesday, Sept. 3.
Analysts expected earnings was $0.19 per share, a significant drop from $0.53 in the same period last year.
Revenue is also projected to decline slightly, from $4.94 billion a year ago to $4.7 billion this quarter.
While these numbers suggest some challenges in Macy’s retail performance, Macys stock continues to attract attention thanks to its generous dividend payout.
Dividend Income Potential
Currently, Macys stock offers an annual dividend yield of 5.52%, translating to $0.72 per share annually, or $0.18 per share quarterly.
This high yield positions Macy’s as one of the more attractive dividend plays in today’s market.
So how can you actually earn money from stocks like Macy’s through dividends? Let’s do the math.
- To generate $500 per month ($6,000 per year), you would need about 8,333 shares of Macys stock, which equals an investment of roughly $110,245 at the current price.
- If your target is more conservative say $100 monthly ($1,200 annually), you would need about 1,666 shares, or around $22,041 invested in Macy’s.
This demonstrates how even modest positions in Macys stock can provide consistent cash flow, making it appealing for investors seeking reliable income streams.
Understanding Dividend Yield Fluctuations
It’s important to remember that dividend yields are not fixed. They fluctuate with changes in both the stock price and the company’s dividend policy. For example:
- If a stock pays $2 annually and trades at $50, the yield is 4%.
- If the price rises to $60, the yield drops to 3.33%.
- If the price falls to $40, the yield climbs to 5%.
The same principle applies to Macys stock. Investors must keep in mind that future dividends can change based on Macy’s earnings performance and overall financial health.
Also See: Why Coca Cola Stock Is the Perfect Dividend Stock for Millennials
Is Macy’s the Best Stock for Dividend Income?
While Macys stock may not be the Best Stock for growth given current retail headwinds, it does stand out for income investors who want to earn money from stocks through dividends.
With its high yield, Macy’s offers an attractive opportunity for those looking to supplement monthly cash flow.
That said, potential investors should weigh the risks. Falling earnings and softer revenue could put pressure on future dividend payments.
A balanced approach combining Macys stock with other dividend-paying companies may be the best strategy for building a reliable passive income portfolio.
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