Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Associated Banc-Corp in Focus

Associated Banc-Corp (ASB) is headquartered in Green Bay, and is in the Finance sector. The stock has seen a price change of -19.54% since the start of the year. Currently paying a dividend of $0.23 per share, the company has a dividend yield of 4.78%. In comparison, the Banks - Midwest industry's yield is 3.47%, while the S&P 500's yield is 1.68%.

Looking at dividend growth, the company's current annualized dividend of $0.92 is up 3.4% from last year. In the past five-year period, Associated Banc-Corp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5.65%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Associated Banc-Corp's payout ratio is 42%, which means it paid out 42% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, ASB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.43 per share, representing a year-over-year earnings growth rate of 2.10%.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer 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. That said, they can take comfort from the fact that ASB is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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