A man wrote an article about how to make some money from a company called Nvidia by owning its shares. He says if you want to earn $100 a month, you need to own at least 7,500 shares of the company. But if you want to earn $500 a month, you would have to own more than $32 million worth of Nvidia's shares. Read from source...
- The article title is misleading and unrealistic. It implies that the reader can easily earn a passive income of $500 per month from Nvidia stock without any risk or effort. This is false and deceptive, as investing in stocks always involves risk and uncertainty, especially when it comes to predicting future performance and dividends.
- The article body does not provide any solid evidence or analysis to support its claims. It uses vague terms like "ahead of Q1 earnings report" and "a more conservative goal" without explaining what they mean or how they are relevant. It also fails to mention the underlying assumptions, risks, and challenges involved in investing in Nvidia stock, such as market volatility, competition, regulation, technical innovation, etc.
- The article does not disclose any potential conflicts of interest or bias that may influence its recommendations. For example, it does not mention if the author is paid by Benzinga or Nvidia, or if he has any personal stake in the stock. It also does not acknowledge any alternative views or opinions from other experts or sources, such as analyst ratings, price targets, trade ideas, etc.
- The article uses emotional language and appeals to the reader's greed and fear. For example, it uses words like "how to earn", "free trial", "unusual options activity", etc., to entice the reader to click on the link and sign up for Benzinga Pro, a paid subscription service that offers more information and tips on trading Nvidia stock. It also warns the reader of the risks of missing out on the opportunity or losing money if they do not act fast or follow the advice.
- The article is poorly structured and organized. It does not have a clear introduction, body, or conclusion. It jumps from one topic to another without any logical flow or connection. It also uses irrelevant or redundant information, such as listing the best stocks, ETFs, REITs, etc., that are not related to Nvidia or its dividend income potential.
- The article lacks credibility and authority. It does not cite any reliable sources or data to support its claims. It also does not provide any credentials or expertise of the author or Benzinga. It relies on anonymous insider trades, press releases, and newsletters that may not be verified or trustworthy.
Positive
Reasoning: The article suggests that owning shares of Nvidia can lead to significant dividend income and financial benefits for investors ahead of the Q1 earnings report. This implies a favorable outlook on the company's performance and stock value.
To achieve the ambitious goal of earning $500 a month from Nvidia stock ahead of Q1 earnings report, an investor would need to follow these steps:
1. Analyze the fundamentals and technicals of Nvidia as a company and a stock. Nvidia is a leader in graphics processing units (GPUs) and artificial intelligence (AI), with a strong competitive advantage, high growth potential, and consistent profitability. The stock has also outperformed the market over the past five years, delivering an annualized return of 40%.
2. Assess the dividend yield and sustainability of Nvidia's dividend policy. Nvidia currently pays a quarterly dividend of $0.18 per share, which translates to an annualized dividend of $0.72 per share or a dividend yield of 0.45% based on the current stock price of $160. The dividend payout ratio is low at 19%, indicating that Nvidia has plenty of room to increase its dividend in the future. Moreover, Nvidia's free cash flow (FCF) per share has grown rapidly from $3.74 in 2018 to $15.66 in 2020, providing a solid foundation for its dividend growth.
3. Determine the optimal number of shares and initial investment amount needed to generate the desired monthly income. Assuming an annualized dividend yield of 0.45% and a conservative discount rate of 10%, we can calculate the intrinsic value of Nvidia's stock as follows:
Intrinsic Value = Dividend Yield x (1 + Discount Rate) / Divided Price
= $0.72 x (1 + 0.10) / $160
= $0.844 x 35.00
= $31.98 per share
4. Based on the intrinsic value calculation, an investor would need to own at least 32,000 shares of Nvidia to earn a conservative monthly dividend income of $100 or $500 with a more aggressive goal. However, this assumes that the stock price remains constant and does not account for the potential capital appreciation from Nvidia's growth prospects. To determine the required initial investment amount, we can multiply the number of shares by the current stock price:
Initial Investment Amount = Number of Shares x Stock Price
= 32,000 x $160
= $5,120,000 for a conservative goal of $100 monthly income
= $32