Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Fulton Financial in Focus

Fulton Financial (FULT Quick QuoteFULT - Free Report) is headquartered in Lancaster, and is in the Finance sector. The stock has seen a price change of 2.8% since the start of the year. The financial holding company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 3.63% compared to the Banks - Northeast industry's yield of 2.6% and the S&P 500's yield of 1.56%.

Taking a look at the company's dividend growth, its current annualized dividend of $0.72 is up 4.3% from last year. Over the last 5 years, Fulton Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 7.12%. 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, Fulton Financial's payout ratio is 39%, which means it paid out 39% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, FULT expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $1.91 per share, which represents a year-over-year growth rate of 3.24%.

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. 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 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 FULT is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).