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 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.

CNB Financial in Focus

Headquartered in Clearfield, CNB Financial (CCNE Quick QuoteCCNE - Free Report) is a Finance stock that has seen a price change of -3.46% so far this year. The bank holding company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 3% compared to the Banks - Northeast industry's yield of 2.78% and the S&P 500's yield of 1.53%.

Looking at dividend growth, the company's current annualized dividend of $0.72 is up 1.4% from last year. Over the last 5 years, CNB Financial has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.17%. 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. CNB's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.

CCNE is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $2.64 per share, with earnings expected to increase 10.46% from the year ago period.

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. It's important to keep in mind that not all companies provide a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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 CCNE is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).