All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, 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 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.

Headquartered in San Mateo, Franklin Resources (BEN Quick QuoteBEN - Free Report) is a Finance stock that has seen a price change of 40.23% so far this year. The investment manager is paying out a dividend of $0.33 per share at the moment, with a dividend yield of 3.94% compared to the Financial - Investment Management industry's yield of 2.8% and the S&P 500's yield of 1.38%.

Looking at dividend growth, the company's current annualized dividend of $1.32 is up 3.1% from last year. Over the last 5 years, Franklin Resources has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.38%. 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. Franklin Resources's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.

BEN is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $2.79 per share, representing a year-over-year earnings growth rate of 25.68%.

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.

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 BEN is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).