Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Hancock Whitney in Focus

Hancock Whitney (HWC) is headquartered in Gulfport, and is in the Finance sector. The stock has seen a price change of 7.77% since the start of the year. Currently paying a dividend of $0.4 per share, the company has a dividend yield of 2.71%. In comparison, the Banks - Southeast industry's yield is 2.28%, while the S&P 500's yield is 1.49%.

In terms of dividend growth, the company's current annualized dividend of $1.60 is up 6.7% from last year. Hancock Whitney has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 7.74%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Hancock Whitney's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for HWC for this fiscal year. The Zacks Consensus Estimate for 2025 is $5.39 per share, with earnings expected to increase 1.32% from the year ago period.

Bottom Line

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, HWC is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).

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