Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 Financial Bancorp in Focus

First Financial Bancorp (FFBC Quick QuoteFFBC - Free Report) is headquartered in Cincinnati, and is in the Finance sector. The stock has seen a price change of -6.62% since the start of the year. The holding company for First Financial Bank is currently shelling out a dividend of $0.24 per share, with a dividend yield of 3.82%. This compares to the Banks - Midwest industry's yield of 3.12% and the S&P 500's yield of 1.54%.

In terms of dividend growth, the company's current annualized dividend of $0.96 is up 2.1% from last year. In the past five-year period, First Financial Bancorp has increased its dividend 1 times on a year-over-year basis for an average annual increase of 0.65%. 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 Financial's current payout ratio is 36%. This means it paid out 36% of its trailing 12-month EPS as dividend.

FFBC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $2.63 per share, which represents a year-over-year growth rate of 0.38%.

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. However, not all companies offer 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. With that in mind, FFBC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).