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.

Brookfield Infrastructure Partners in Focus

Based in Hamilton, Brookfield Infrastructure Partners (BIP Quick QuoteBIP - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.22%. The operator of utility, transportation and energy assets is paying out a dividend of $0.43 per share at the moment, with a dividend yield of 5.42% compared to the REIT and Equity Trust - Other industry's yield of 4.8% and the S&P 500's yield of 1.56%.

In terms of dividend growth, the company's current annualized dividend of $1.72 is up 6.2% from last year. Over the last 5 years, Brookfield Infrastructure Partners has increased its dividend 4 times on a year-over-year basis for an average annual increase of 5%. 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. Brookfield Infrastructure's current payout ratio is 52%. This means it paid out 52% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, BIP expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.45 per share, representing a year-over-year earnings growth rate of 10.58%.

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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BIP 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).