Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

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 1%, 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. Hecla Mining Co. (NYSE:HL): Engages in the discovery, acquisition, development, production, and marketing of silver, gold, lead, and zinc. Market cap at $1.64B, most recent closing price at $5.73. Net institutional purchases in the current quarter at 15.2M shares, which represents about 5.35% of the company's float of 284.03M shares.

Dividend yield at 1.57%, payout ratio at 33%, and current ratio at 3.37. As of September 30th, 2012, the 2 top holders of the stock are Van Eck Associates (5.62%), and Vanguard Group (5.15%).

2. Sturm, Ruger & Co. Inc. (NYSE:RGR): Engages in the design, manufacture, and sale of firearms in the United States. Market cap at $873.12M, most recent closing price at $45.57. Net institutional purchases in the current quarter at 1.7M shares, which represents about 9.18% of the company's float of 18.52M shares.

Dividend yield at 2.84%, payout ratio at 32.89%, and current ratio at 3.18. As of September 30th, 2012, the top 2 holders of the stock are London Company of Virginia (7.24%), and Allianz Asset Management (7.16%).

3. Columbia Sportswear Company (NASDAQ:COLM): Engages in the design, development, sourcing, marketing, and distribution of outdoor apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. Market cap at $1.83B, most recent closing price at $53.79. Net institutional purchases in the current quarter at 1.3M shares, which represents about 10.43% of the company's float of 12.47M shares. Dividend yield at 1.64%, payout ratio at 30.62%, and current ratio at 4.22. As of September 29th, 2012, the top 2 holders of the stock are Royce & Associates (5.95%), and SouthernSun Asset Management (5.1%).

4. 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 $1.22B, most recent closing price at $19.48. Net institutional purchases in the current quarter at 10.7M shares, which represents about 17.16% of the company's float of 62.37M shares.

Dividend yield at 1.85%, payout ratio at 30.76%, and current ratio at 4.07. As of September 29th, 2012, the top 2 holders of the stock are Kornitzer Capital Management (9%), and Artisan Partners Limited Partnership (6.7%).

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

Source: 4 Highly Liquid Dividend Stocks Being Bought Up By Hedge Funds