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Do you prefer stocks that offer both dividend income and the real possibility of capital gains? You might be interested in our list below:

We began by screening for low-debt dividend stocks: those paying dividend yields above 1%, with sustainable payout ratios below 50%, and debt-to-equity ratios below 0.1.

Then we screened for 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, who often have more sophisticated market data on hand than main street investors, expect these names to outperform.

For an interactive version of this chart, click on the image below. Tool provided by Kapitall, analyst ratings sourced from Zacks Investment Research.

As a recap, these names have:

- Low debt: Total Debt / Equity ratio <.1

- Dividend yields between 1% and 7%, and sustainable payout ratios below 50%.

- Market caps above $300 million

Do you think money managers are making the right call on these dividend paying stocks? Use this list as a starting-off point for your own analysis.

1. 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 $1.21B, most recent closing price at $19.54.

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 1.84, and debt/Equity at 0.07. Payout ratio at 37%. As of September 30th, 2012, the top 2 holders of the stock are FMR, LLC, and T. Rowe Price.

2. CBOE Holdings, Inc. (NASDAQ:CBOE): Intends to operate as the holding company for Chicago Board Options Exchange, which operates as an organized marketplace for the trade of standardized, listed options on equity securities. Market cap at $2.56B, most recent closing price at $29.46.

Net institutional purchases in the current quarter at 4.4M shares, which represents about 5.12% of the company's float of 85.97M shares. Dividend yield at 2%, and debt/equity at 0. Payout ratio at 31%. As of September 30th, 2012, the top 2 holders of the stock are T. Rowe Price, and Horizon Kinetics.

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 $1.77B, most recent closing price at $53.36.

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 1.65%, and debt/equity at 0.01. Payout ratio at 32%. As of September 30th, 2012, the top 2 holders of the stock are Royce & Associates, and SouthernSun Asset Management.

4. First Republic Bank (NYSE:FRC): Provides private banking, private business banking, investment management, brokerage, trust services, and real estate lending services in California, Nevada, and New York. Market cap at $4.22B, most recent closing price at $32.78.

Net institutional purchases in the current quarter at 4.5M shares, which represents about 6.34% of the company's float of 71.03M shares. Dividend yield at 1.22%, and debt/equity at 0.02. Payout ratio at 11%. As of September 30th, 2012, the top 2 holders of the stock are General Atlantic and GI GP III L.P.

5. 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 $5.83.

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 1.54%, and debt/equity at 0.01. Payout ratio at 11%. As of September 30th, 2012, the top 2 holders of the stock are Van Eck Associates, and the Vanguard Group.

6. Kimball International, Inc. (KBALB): Manufactures and sells electronic assemblies and furniture in the United States and internationally. Market cap at $442.11M, most recent closing price at $11.61.

Net institutional purchases in the current quarter at 2.4M shares, which represents about 8.36% of the company's float of 28.70M shares. Dividend yield at 1.72%, and debt/equity at 0. Payout ratio at 44%. As of September 30th, 2012, the top 2 holders of the stock are Donald Smith 7 Co., and The Vanguard Group.

7. Provident New York Bancorp (PBNY): Operates as the holding company for Provident Bank that provides commercial, community, and retail banking products and services to businesses and individuals in New York and New Jersey. Market cap at $408.91M, most recent closing price at $9.31.

Net institutional purchases in the current quarter at 6.8M shares, which represents about 22.63% of the company's float of 30.05M shares. Dividend yield at 2.58%, and debt/equity at 0. Payout ratio at 46%. As of September 30th, 2012, the top 2 holders of the stock are Dimensional Fund Advisors, and Endicott Management Company.

8. Sturm, Ruger & Co. Inc. (NYSE:RGR): Engages in the design, manufacture, and sale of firearms in the United States. Market cap at $829.05M, most recent closing price at $45.4.

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 2.85%, and debt/equity at 0. Payout ratio at 33%. As of September 30th, 2012, the top 2 holders of the stock are London Company of Virginia, and Allianz Asset Management.

*Institutional data sourced from Fidelity.

Source: Money Managers Buying These 8 Low-Debt Dividend Stocks