All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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.

ACNB in Focus

ACNB (ACNB) is headquartered in Gettysburg, and is in the Finance sector. The stock has seen a price change of 3.09% since the start of the year. The bank is currently shelling out a dividend of $0.32 per share, with a dividend yield of 3.12%. This compares to the Banks - Southwest industry's yield of 1.16% and the S&P 500's yield of 1.59%.

Looking at dividend growth, the company's current annualized dividend of $1.28 is up 1.6% from last year. In the past five-year period, ACNB has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6%. 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. ACNB's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, ACNB expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $4.28 per share, which represents a year-over-year growth rate of 14.75%.

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.

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 ACNB 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

ACNB Corporation (ACNB) : Free Stock Analysis Report

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

Zacks Investment Research