ConocoPhillips (NYSE:COP) shares closed higher on Tuesday.

Shares of energy companies traded higher during the session as tensions in the Middle East heightened.

Some investors may be eyeing potential gains from ConocoPhillips' dividends. As of now, the crude oil producer offers an annual dividend yield of 2.85%. That's a quarterly dividend of 78 cents per share ($3.12 a year).

To figure out how to earn $500 monthly from ConocoPhillips, we start with the yearly target of $6,000 ($500 x 12 months).

Next, we take this amount and divide it by ConocoPhillips' $3.12 dividend: $6,000 / $3.12 = 1,923 shares

So, an investor would need to own approximately $210,319 worth of ConocoPhillips, or 1,923 shares to generate a monthly dividend income of $500.

Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / $3.12 = 385 shares, or $42,107 to generate a monthly dividend income of $100.

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.

For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).

Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).

Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.

Price Action: Shares of ConocoPhillips gained by 3.9% to close at $109.37 on Tuesday.

A report suggests Iran is preparing to directly attack Israel, which could create shocks to the global economy.

On Sept. 30, Truist Securities analyst Neal Dingmann maintained ConocoPhillips with a Buy rating and lowered the price target from $145 to $138.

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