Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.

Banco Santander-Chile in Focus

Banco Santander-Chile (BSAC Quick QuoteBSAC - Free Report) is headquartered in Santiago Chile, and is in the Finance sector. The stock has seen a price change of 32.72% since the start of the year. Currently paying a dividend of $0.99 per share, the company has a dividend yield of 3.96%. In comparison, the Banks - Foreign industry's yield is 3.33%, while the S&P 500's yield is 1.54%.

Taking a look at the company's dividend growth, its current annualized dividend of $0.99 is up 74% from last year. Banco Santander-Chile has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 9.01%. 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. Banco Santander-Chile's current payout ratio is 25%. This means it paid out 25% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, BSAC expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $2.31 per share, which represents a year-over-year growth rate of 22.87%.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.

Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious 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 BSAC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).