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Do you like the comfort that dividend income can bring? Do you follow the trends of smart money managers? We researched stocks with this in mind.

We started by looking for stocks with a return on investment (ROI) above the industry average. ROI is a popular measure of profitability. It is calculated by dividing net profits by total assets.

We took this a step further by looking for stocks that pay a dividend yield of at least 2%, but not higher than 5%. This allowed us to focus on names with a strong credit profile.

Finally, we researched their 13F's looking for those 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 into the future.

5 stocks met the criteria.

Interactive Chart: Press Play to compare changes in analyst changes over the last two years for the five stocks mentioned below.

Would you invest in these companies? Use this list as a starting point of your analysis.

1. Giant Interactive Group, Inc. (NYSE:GA): Develops and operates online games in the People's Republic of China.

  • Market cap at $1.5B, most recent closing price at $6.26.
  • Net institutional purchases in the current quarter at 12.9M shares, which represents about 11.94% of the company's float of 108.02M shares. The top 2 holders of the stock are Overlook Holdings Limited, and Wellington Management Company LLP.
  • Dividend yield at 4.63%.

2. Kronos Worldwide Inc. (NYSE:KRO): Engages in the production and marketing of titanium dioxide pigments in North America and Europe.

  • Market cap at $2.01B, most recent closing price at $17.38.
  • Net institutional purchases in the current quarter at 1.8M shares, which represents about 9.02% of the company's float of 19.95M shares. The 2 top holders of the stock are American International Group, and LSV Asset Management.
  • Dividend yield at 3.45%.

3. National Research Corp. (NRCI): Provides performance measurement and improvement services, healthcare analytics, and governance education to the healthcare industry in the United States and Canada.

  • Market cap at $386.44M, most recent closing price at $56.25.
  • Net institutional purchases in the current quarter at 305.8K shares, which represents about 11.67% of the company's float of 2.62M shares. The 2 top holders of the stock are Bessemer Group, and Kayne Anderson Rudnick Investment Management.
  • Dividend yield at 2.2%.

4. Nu Skin Enterprises Inc. (NYSE:NUS): Develops and distributes anti-aging personal care products and nutritional supplements worldwide.

  • Market cap at $2.45B, most recent closing price at $41.95.
  • Net institutional purchases in the current quarter at 2.8M shares, which represents about 5.45% of the company's float of 51.36M shares. The 2 top holders of the stock are Royce & Associates, and The Vanguard Group.
  • Dividend yield at 2.86%.

5. Meridian Bioscience Inc. (NASDAQ:VIVO): Develops, sells, and distributes diagnostic test kits.

  • Market cap at $898.81M, most recent closing price at $21.70.
  • Net institutional purchases in the current quarter at 2.6M shares, which represents about 6.47% of the company's float of 40.21M shares. The 2 top holders of the stock are Neuberger Berman Group, LLC, and Brown Capital Management.
  • Dividend yield at 3.5%.

* All accounting data sourced from Google Finance.

Source: Money Managers Are Buying These 5 Dividend Stocks With Higher ROI Than Industry Peers