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A trustworthy manager with good profit record can offer unexpectedly high returns. Most asset management companies share their profits with their shareholders in terms of fat dividend checks. Here is a list of the top five asset management companies with reasonable P/E ratios paying excellent dividends. All of the following companies offered a dividend yield of 3% minimum, and have a minimum market capitalization of $300 million. Data is derived from finviz:

Federated Investors Inc. (NYSE:FII): FII provides investment services to investment companies, pooled investment vehicles, banking or thrift institutions, high net worth individuals as well as registered investment advisors. Federated Investors has a market cap of $2.75 billion, and a trailing ratio of 15.3. The forward P/E ratio is 13.03. FII had an annualized EPS growth of %3.04 over the last five years. FII has a profit margin of 18.8 and a dividend yield of 3.60%. Recent dividend history of Federated Investors is as follows:

Feb 4, 2011

$0.24

Nov 4, 2010

$0.24

Aug 4, 2010

$0.24

May 5, 2010

$0.24

KKR Financial Corp. (KFN): KFN operates as a specialty finance company in a number of asset classes. The company mostly invests in investment grade corporate debt. The market cap of KKR Financial is $1.78 billion, and its P/E ratio is 4.31, while forward P/E ratio is 5.6. KKR Financial had a huge EPS growth of 64.48% over the last five years, and increased its earnings by 366.89% this year. FBR Capital and JMP Securities suggested an outperform rating for KKR Financial. With a net profit margin of 75.4%, and a dividend yield of 6.00%, KFN is an outstanding stock for dividend lovers. Recent dividend payments of KKR Financial per share are:

Feb 16, 2011

$0.15

Nov 15, 2010

$0.14

Aug 16, 2010

$0.12

May 12, 2010

$0.10

Pennantpark Invt. Corp. (NASDAQ:PNNT): PNNT is a business development firm specializing in direct and mezzanine investments. The market capital of Pennantpark is $428.3 million and trailing ratio is 12.7, while forward P/E ratio is 9.52. PNNT had an annual EPS growth of 14.93% during the last five years. With a dividend yield of 9.15, and a net profit margin of 50.18%, PNNT is a marvelous stock for dividend lovers. FBR Capital, JMP Securities and Keefe Bruyette suggested outperform for PNNT and Ladenburg Thalmann, Janney Scott and Sun Trust Humphrey recommend buying. Recent dividend payments of Pennantpark per share are:

Mar 11, 2011

$0.27

Dec 15, 2010

$0.26

Sep 10, 2010

$0.26

Jun 22, 2010

$0.26

Triangle Capital Corp. (NYSE:TCAP): TCAP is a venture capital and private equity firm headquartered in Raleigh, North California. TCAP greatly benefits from its location in America's fastest growing high-tech Triangle region. The market capital of Triangle Capital is $340.4 million, and P/E ratio is 9.24, while forward P/E ratio is 10.1. TCAP had an EPS growth of 33.67% over the past five years. With a profit margin of 70.56% and a dividend yield of 9.14%, TCAP could be a good stock for dividend lovers. Recent dividend history of Triangle Capital is:

Mar 14, 2011

$0.42

Dec 13, 2010

$0.42

Sep 3, 2010

$0.41

Jun 11, 2010

$0.41

Westwood Holdings Group (NYSE:WHG): Dallas based Westwood, founded in 1983, manages investment assets operating through two subsidiaries: Westwood Trust and Westwood Management. Westwood has a market cap of $314.3 million, and a P/E ratio of 25.5. WHG had an EPS growth of 19.14% during the last five years. Net profit margin in the last year was 20.39%, while the company paid a dividend yield of 3.47%. Recent dividend payments of Westwood per share are as follows:

Mar 11, 2011

$0.35

Nov 29, 2010

$0.66

Sep 13, 2010

$0.33

Jun 11, 2010

$0.33


Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TCAP over the next 72 hours.

Source: Top 5 Asset Management Companies Paying Dividends of 3% or More