When Phillips 66 (NYSE:PSX) releases earnings results for its third quarter on Tuesday, Oct. 29, analysts expect the company to report quarterly earnings at $2.1 per share. That's down from $4.63 per share in the year-ago period.

Phillips 66 projects to report revenue of $34.75 billion for the recent quarter, down from $40.32 billion a year earlier, according to data from Benzinga Pro.

With the recent buzz around Phillips 66, some investors may be eyeing potential gains from the company's dividends, too. The company currently offers an annual dividend yield of 3.31% — a quarterly dividend of $1.15 per share ($4.60 a year).

Want to earn $500 monthly from Phillips 66? Start with the yearly target of $6,000 ($500 x 12 months).

Next, take that amount and divide it by Phillips 66's $4.60 dividend: $6,000 / $4.60 = 1,304 shares

So, an investor would need to own approximately $181,165 worth of Phillips 66, or 1,304 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 = 261 shares, or $36,261 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 Phillips 66 gained by 3.3% to close at $138.93 on Thursday.

On Oct. 2, JPMorgan analyst John Royall maintained Phillips 66 with an Overweight rating and lowered the price target from $160 to $141.

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