Jefferies Financial Group Inc. (JEF) is set to report fourth-quarter earnings after the closing bell on Wednesday, Jan. 7, 2025, and Wall Street is anticipating modest growth across the board.
Analysts are projecting quarterly earnings of 94 cents per share, up slightly from 93 cents per share in the same period last year. Revenue estimates sit at $1.99 billion, compared to $1.96 billion a year earlier. The numbers suggest steady momentum for the investment banking and capital markets firm as it closes out 2024.
The stock got a vote of confidence on Dec. 11 when Oppenheimer analyst Chris Kotowski maintained his Outperform rating and bumped the price target from $81 to $97, a meaningful increase that reflects growing optimism about Jefferies Financial's prospects.
Breaking Down the Dividend Math
Beyond the earnings excitement, income-focused investors might be eyeing Jefferies Financial for its dividend potential. The company currently offers an annual dividend yield of 2.52%, paying out 40 cents per share quarterly, which translates to $1.60 per share annually.
So what does it take to generate meaningful monthly income from this dividend? The math is straightforward but requires substantial capital.
To pocket $500 per month (or $6,000 annually) from dividends alone, you would need to invest approximately $237,975, which would buy you roughly 3,750 shares. For a more modest goal of $100 monthly (or $1,200 per year), you're looking at an investment of about $47,595 for approximately 750 shares.
The calculation: Divide your target annual income by the annual dividend per share. So $6,000 divided by $1.60 equals 3,750 shares needed for $500 monthly income. Similarly, $1,200 divided by $1.60 equals 750 shares for $100 monthly income.
Why Dividend Yields Move Around
Here's the thing about dividend yields: they're not static. The yield changes constantly because it depends on two moving parts—the dividend payment itself and the stock price.
How the math works: Dividend yield is calculated by dividing the annual dividend payment by the current stock price.
For example, imagine a stock pays a $2 annual dividend and trades at $50. That's a 4% yield ($2 divided by $50). But if the stock price climbs to $60, the yield drops to 3.33% ($2 divided by $60), even though the dividend payment stayed the same. Flip the scenario—if the stock falls to $40, the yield jumps to 5% ($2 divided by $40).
The same dynamic applies when companies adjust their dividend payments. If Jefferies increases its dividend while the stock price holds steady, the yield goes up. Cut the dividend, and the yield falls accordingly.
Recent Price Movement
JEF Price Action: Shares of Jefferies Financial gained 2.4% on Friday, closing at $63.46 as investors positioned ahead of the upcoming earnings report.