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By Jake Mann

In today's markets, there are literally over 3,000 publicly traded companies that offer equity investors a dividend yield. Of this group, some are deemed worthy of being called "high-dividend plays," and most are analyzed on the blogosphere without much rhyme or reason. Most readers probably understand that dividend-paying stocks are useful because they generate steady, repeatable income, but they might not know how to parse down the data into anything meaningful.

That's where we come in. At Insider Monkey, we track short and long-term hedge fund sentiment, and our research has shown that there are market-beating opportunities in this space. By using 13D/13G filings, which indicate recent changes in hedge funds' equity portfolios, we can determine if there are any dividend stocks that have recent support from the smart money. Because these filings typically indicate that some sort of value-creation spark is on the horizon, we can find some of the best opportunities for the income-seeking investor. Let's take a look at a few recent filings.

Bob Evans

Bob Evans Farms (NASDAQ:BOBE) is a perfect example of a dividend-paying stock with a potential catalyst in its future. Tom Sandell and Sandell Asset Management filed a 13D on Tuesday disclosing a 5.1% stake in the food company. According to the hedge fund manager, Bob Evans trades at a "conglomerate discount" because the market is improperly valuing its restaurant dining business (Bob Evans Restaurants), instead choosing to focus on its packaged food division (BEF Foods). More specifically, Bob Evans Restaurants' "482 wholly-owned restaurant properties" have "significant real estate value," so Sandell thinks it'd be best to spin off or sell BEF Foods.

If such a move can be made, Sandell estimates it could allow Bob Evans to initiate a share buyback in excess of $500 million, also adding, "an average price of $78.50 per share, could be justified." Shares of Bob Evans' stock trade just below $58 a share and pay a dividend yield of 2.2%, placing it in the upper fourth of the restaurant industry. Investors interested in this income can buy a stock with an upside potential of 35% under Sandell's scenario. The activist's previous successes with Wendy's, Southern Union and Volvo indicate it's reasonable to expect some sort of value-creation to come from Bob Evans' corner.

Boise

In that same light, paper product manufacturer Boise (NYSE:BZ) is another dividend stock that has an activist influence. The company, which has paid special dividends semi-regularly (with the last one coming in December 2012, good for a yield of 9.2% at the time), was mentioned in a 13D from Clint Carlson and Carlson Capital on Tuesday. The hedge fund disclosed that it now owns 6.7% of Boise's common stock, and according to a letter attached to the 13D, it hopes to pursue some value-creation ideas.

The most promising idea Carlson Capital has is a spin-off of Boise's paper segment. The filing also mentions that the tender offer from Packaging Corporation of America (at $12.55 a share) is below the full company's justified trading price range of $14-$17 a share, according to Carlson. The letter states, "a business separation would better enable Boise to participate in industry consolidation […] Boise's ownership of both Paper and Packaging assets is suboptimal and has severely limited the value it could create." Equally as important, Carlson mentions that a spin-off of paper from packaging would make the latter more attractive in an outright sale than PCA's proposed value on the entire company.

The hedge fund estimates that Boise's paper segment could be worth at least $14 a share, while packaging has a standalone value of around $17 a share. This is the same range that Boise's current structure is worth, but separation may allow the market to properly value both segments in an easier manner. With that being said, current shareholders can get Boise at a 10% to 35% discount based on these price targets, and if all else fails, there's still the company's history of special dividend payments to look forward to.

TAL Education

Mega-hedge fund Tiger Global filed an amended 13D earlier this week detailing that it now owns about 18% of TAL Education Group (NYSE:XRS). We don't consider Tiger Global an activist by any means, so this looks like more of a standard play on the fundamentals. TAL, which sports the brand name "Xueersi" in China for its after-school tutoring programs, has issued at least five consecutive earnings beats on the back of growth in "small class business in new markets outside of Beijing and Shanghai," according to its latest quarterly conference call.

Wall Street expects TAL Education to generate earnings growth of almost 40% this year, with five-year averages in the 23%-24% range, and shares trade at a fairly cheap price-to-earnings growth ratio of 1.29. A dividend yield of 3.5% is the icing on the cake, but the combination of growth, value and income probably explains why Tiger Global is bullish.

Pep Boys

We'll be brief on this one, as we already covered it individually here on Seeking Alpha. Still, dividend-seeking investors need to be aware of its existence, hence why we're including it in this analysis.

Pep Boys (NYSE:PBY), which pays a dividend yield of almost 1%, has seen support from Mario Gabelli and Gamco Investors in a recent amended 13D filing. Gabelli, who is a billionaire, now owns nearly 10% of the auto parts retailer. He and his team like Pep Boys for three reasons: (1) the company has rare revenue diversification that gives it exposure to do-it-yourself consumers and those seeking expert maintenance, (2) a buyout is a real possibility, and (3) there's a value-based upside of as much as 60% here.

Flushing Financial

Interestingly, Flushing Financial (NASDAQ:FFIC) is another stock that Mario Gabelli and Gamco are bullish on. The fund filed an amended 13D last week, sharing that it now owns over 750,000 shares of Flushing, up by nearly 200,000 shares in comparison with the previous quarter. The financial company, which owns the subsidiary Flushing Savings Bank, had a banner earnings report in the second quarter, beating the Street's estimates by 15% with $0.33 in EPS. The company offers investors a dividend yield of 2.8%, and despite the latest beat, it trades at less than 14 times forward earnings, much cheaper than savings and loan peers like Rockville Financial (NASDAQ:RCKB) and Provident New York (PBNY). Unlike Pep Boys, we don't see a special situation surrounding this Gamco investment, but the combination of yield and value is reasonably attractive.

Source: 5 Dividend Stocks Smart Money Is Betting On