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

KB Financial in Focus

KB Financial (KB) is headquartered in Seoul, and is in the Finance sector. The stock has seen a price change of 37.06% since the start of the year. The financial services provider is paying out a dividend of $0.46 per share at the moment, with a dividend yield of 3.24% compared to the Banks - Foreign industry's yield of 4.41% and the S&P 500's yield of 1.59%.

Looking at dividend growth, the company's current annualized dividend of $1.84 is up 102.6% from last year. Over the last 5 years, KB Financial has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.01%. 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. KB Financial's current payout ratio is 23%. This means it paid out 23% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, KB expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $9.41 per share, which represents a year-over-year growth rate of 8.66%.

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. However, not all companies offer 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. 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, KB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).

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