Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Phillips Edison & Company, Inc. (PECO Quick QuotePECO - Free Report) is headquartered in Cincinnati, and is in the Finance sector. The stock has seen a price change of 3.68% since the start of the year. Currently paying a dividend of $0.33 per share, the company has a dividend yield of 3.52%. In comparison, the REIT and Equity Trust - Retail industry's yield is 4.13%, while the S&P 500's yield is 1.5%.

Looking at dividend growth, the company's current annualized dividend of $1.30 is up 3.8% from last year. Over the last 5 years, Phillips Edison & Company, Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.79%. 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. Phillips Edison & Company's current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, PECO expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $2.74 per share, representing a year-over-year earnings growth rate of 5.38%.

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, PECO is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).