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.

First Busey in Focus

Based in Champaign, First Busey (BUSE Quick QuoteBUSE - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.51%. The bank holding company is paying out a dividend of $0.25 per share at the moment, with a dividend yield of 4.26% compared to the Banks - Midwest industry's yield of 2.82% and the S&P 500's yield of 1.48%.

Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 4.2% from last year. First Busey has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 2.11%. 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. First Busey's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, BUSE expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.48 per share, which represents a year-over-year growth rate of 19.23%.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, BUSE presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).