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

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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.

Goldman Sachs (GS Quick QuoteGS - Free Report) is headquartered in New York, and is in the Finance sector. The stock has seen a price change of -1.82% since the start of the year. The investment bank is currently shelling out a dividend of $4.50 per share, with a dividend yield of 2.09%. This compares to the Financial - Investment Bank industry's yield of 1.2% and the S&P 500's yield of 1.47%.

Looking at dividend growth, the company's current annualized dividend of $18.00 is up 28.6% from last year. Over the last 5 years, Goldman Sachs has increased its dividend 4 times on a year-over-year basis for an average annual increase of 22.04%. 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. Goldman's current payout ratio is 31%, meaning it paid out 31% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for GS for this fiscal year. The Zacks Consensus Estimate for 2026 is $57.86 per share, with earnings expected to increase 12.74% from the year ago period.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, GS 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).