Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

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.

Kimco Realty in Focus

Kimco Realty (KIM) is headquartered in Jericho, and is in the Finance sector. The stock has seen a price change of -9.86% since the start of the year. Currently paying a dividend of $0.25 per share, the company has a dividend yield of 4.73%. In comparison, the REIT and Equity Trust - Retail industry's yield is 4.41%, while the S&P 500's yield is 1.6%.

Looking at dividend growth, the company's current annualized dividend of $1 is up 3.1% from last year. Kimco Realty has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 15.31%. 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. Right now, Kimco Realty's payout ratio is 59%, which means it paid out 59% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for KIM for this fiscal year. The Zacks Consensus Estimate for 2025 is $1.71 per share, with earnings expected to increase 3.64% from the year ago period.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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. With that in mind, KIM 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).

Story Continues

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Kimco Realty Corporation (KIM):Free Stock Analysis Report

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

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