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

Ventas in Focus

Headquartered in Chicago, Ventas (VTR) is a Finance stock that has seen a price change of 12.09% so far this year. Currently paying a dividend of $0.48 per share, the company has a dividend yield of 2.91%. In comparison, the REIT and Equity Trust - Other industry's yield is 5.09%, while the S&P 500's yield is 1.59%.

Looking at dividend growth, the company's current annualized dividend of $1.92 is up 6.7% from last year. In the past five-year period, Ventas has increased its dividend 1 times on a year-over-year basis for an average annual increase of 0.37%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Ventas's payout ratio is 59%, which means it paid out 59% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for VTR for this fiscal year. The Zacks Consensus Estimate for 2025 is $3.43 per share, representing a year-over-year earnings growth rate of 7.52%.

Bottom Line

From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Ventas, Inc. (VTR) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research