Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.

BOK Financial in Focus

BOK Financial (BOKF) is headquartered in Tulsa, and is in the Finance sector. The stock has seen a price change of 3.98% since the start of the year. The Regional banking operator is currently shelling out a dividend of $0.57 per share, with a dividend yield of 2.06%. This compares to the Banks - Southwest industry's yield of 0.61% and the S&P 500's yield of 1.54%.

In terms of dividend growth, the company's current annualized dividend of $2.28 is up 2.7% from last year. BOK Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 2.01%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, BOK Financial's payout ratio is 28%, which means it paid out 28% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for BOKF for this fiscal year. The Zacks Consensus Estimate for 2025 is $8.83 per share, which represents a year-over-year growth rate of 7.16%.

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.

Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BOKF 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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