Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.

Northern Trust Corporation (NTRS Quick QuoteNTRS - Free Report) is headquartered in Chicago, and is in the Finance sector. The stock has seen a price change of 23.36% since the start of the year. The company is paying out a dividend of $0.88 per share at the moment, with a dividend yield of 2.09% compared to the Banks - Major Regional industry's yield of 3.04% and the S&P 500's yield of 1.45%.

Looking at dividend growth, the company's current annualized dividend of $3.52 is up 13.5% from last year. Over the last 5 years, Northern Trust Corporation has increased its dividend 1 times on a year-over-year basis for an average annual increase of 2.01%. 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. Northern Trust's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, NTRS expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $11.65 per share, with earnings expected to increase 29.30% from the year ago period.

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.

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, NTRS 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).