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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Mid Penn Bancorp (MPB Quick QuoteMPB - Free Report) is headquartered in Harrisburg, and is in the Finance sector. The stock has seen a price change of 23.57% since the start of the year. The company is currently shelling out a dividend of $0.22 per share, with a dividend yield of 2.4%. This compares to the Banks - Northeast industry's yield of 2.15% and the S&P 500's yield of 1.32%.

Looking at dividend growth, the company's current annualized dividend of $0.92 is up 12.2% from last year. Over the last 5 years, Mid Penn Bancorp has increased its dividend 1 times on a year-over-year basis for an average annual increase of 1.38%. 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. Mid Penn Bancorp's current payout ratio is 28%, meaning it paid out 28% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, MPB expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $3.33 per share, with earnings expected to increase 10.26% 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. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, MPB 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).