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 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

Based in Gulfport, Hancock Whitney (HWC) is in the Finance sector, and so far this year, shares have seen a price change of 2.74%. The holding company of Whitney Bank and Hancock Bank is currently shelling out a dividend of $0.4 per share, with a dividend yield of 2.85%. This compares to the Banks - Southeast industry's yield of 2.26% and the S&P 500's yield of 1.54%.

Looking at 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%. 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. 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 $5.48 per share, which represents a year-over-year growth rate of 3.01%.

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. However, not all companies offer a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. 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 HWC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Hancock Whitney Corporation (HWC) : Free Stock Analysis Report

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

Zacks Investment Research