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Do you prefer stocks that pay steady dividend income? We ran a screen with dividend sustainability in mind.

We began by screening for highly liquid dividend stocks: those paying dividend yields above 2%, sustainable payout ratios below 50%, and those with current ratios above 3. The current ratio is current assets/current liabilities, so ratios above 3 indicate the company has at least 3 times the liquid assets to cover short-term liabilities.

We then screened for stocks with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform in the future.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks will continue to pay strong dividends? Use this list as a starting point for your own analysis.

List sorted by net institutional purchases as a percent of share float.

1. Allegheny Technologies Inc. (NYSE:ATI): Produces and sells specialty metals worldwide. Market cap at $2.8B, most recent closing price at $25.99. Dividend yield at 2.77%, payout ratio at 42.48%, and current ratio at 3.20. Net institutional purchases in the current quarter at 73.2M shares, which represents about 69.32% of the company's float of 105.60M shares.

2. Sturm, Ruger & Co. Inc. (NYSE:RGR): Engages in the design, manufacture, and sale of firearms in the United States. Market cap at $930.6M, most recent closing price at $48.10. Dividend yield at 2.69%, payout ratio at 32.89%, and current ratio at 3.18%. Net institutional purchases in the current quarter at 3.4M shares, which represents about 19.44% of the company's float of 17.49M shares.

3. True Religion Apparel Inc. (NASDAQ:TRLG): Designs, develops, manufactures, markets, distributes, and sells apparel in North America, Europe, Asia, Australia, Africa, and South America. Market cap at $649.13M, most recent closing price at $24.56. Dividend yield at 3.26%, payout ratio at 32.9%, and current ratio at 6.94%. Net institutional purchases in the current quarter at 2.0M shares, which represents about 8.37% of the company's float of 23.89M shares.

4. Resources Connection Inc. (NASDAQ:RECN): Provides professional services in finance, accounting, risk management and internal audit, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, actuarial, and legal and regulatory services in support of client-led projects and initiatives. Market cap at $475.25M, most recent closing price at $11.19. Dividend yield at 2.14%, payout ratio at 20.45%, and current ratio at 3.93%. Net institutional purchases in the current quarter at 3.2M shares, which represents about 8.% of the company's float of 40.00M shares.

5. RPC Inc. (NYSE:RES): Provides a range of oilfield services and equipment to the oil and gas companies primarily in the United States. Market cap at $2.37B, most recent closing price at $10.80. Dividend yield at 2.14%, payout ratio at 2.96%, and current ratio at 3.34%. Net institutional purchases in the current quarter at 5.5M shares, which represents about 7.47% of the company's float of 73.66M shares.

6. ADTRAN Inc. (NASDAQ:ADTN): Designs, manufactures, markets, and services network access solutions that enable voice, data, video, and Internet communications across wireline and wireless networks worldwide. Market cap at $1.12B, most recent closing price at $17.74. Dividend yield 2.03%, payout ratio at 30.76%, and current ratio at 4.07%. Net institutional purchases in the current quarter at 3.3M shares, which represents about 5.29% of the company's float of 62.43M shares.

Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: 6 Highly Liquid Dividend Stocks Being Bought Up By Hedge Funds