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When a company raises its dividend, while the payout ratio falls over the same time period, it is an especially good sign because it implies that earnings are rising and dividends are being raised without any compromise to dividend sustainability.

We ran a screen on stocks exhibiting these trends, with increases in dividend per share year-over-year and decreases in payout ratio, comparing the trailing-twelve-month ratio to the company’s three-year average. We screened these stocks for those with significant net institutional buying over the current quarter.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬



We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these stocks pay reliable dividends? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. Cliffs Natural Resources Inc. (NYSE:CLF): Produces iron ore pellets, lump and fines iron ore and metallurgical coal products. Market cap of $8.99B. Dividend yield at 1.82%, payout ratio at 6.39%. Current year dividend per share estimate at $0.70 vs. last year dividend per share at $0.51. TTM payout ratio at 6.39% vs. three-year average at 14.22%. Net institutional shares purchased over the current quarter at 9.6M, which is 6.62% of the company's 145.11M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.37). It has been a rough couple of days for the stock, losing 21.68% over the last week.

2. Weight Watchers International, Inc. (NYSE:WTW):
Provides weight management services worldwide. Market cap of $4.02B. Dividend yield at 1.28%, payout ratio at 20.28%. Current year dividend per share estimate at $0.71 vs. last year dividend per share at $0.70. TTM payout ratio at 20.28% vs. three-year average at 27.13%. Net institutional shares purchased over the current quarter at 5.2M, which is 14.82% of the company's 35.09M share float. It has been a rough couple of days for the stock, losing 5.78% over the last week.

3. HollyFrontier Corporation Commo (NYSE:HFC): Operates as an independent petroleum refiner and marketer in the United States. Market cap of $6.23B. Dividend yield at 1.18%, payout ratio at 9.33%. Current year dividend per share estimate at $0.95 vs. last year dividend per share at $0.30. TTM payout ratio at 9.33% vs. three-year average at 29.24%. Net institutional shares purchased over the current quarter at 18.7M, which is 17.93% of the company's 104.29M share float. It has been a rough couple of days for the stock, losing 9.52% over the last week.

4. CF Industries Holdings, Inc. (NYSE:CF):
Manufactures and distributes nitrogen and phosphate fertilizer products, serving agricultural and industrial customers worldwide. Market cap of $10.97B. Dividend yield at 1.05%, payout ratio at 2.80%. Current year dividend per share estimate at $0.92 vs. last year dividend per share at $0.40. TTM payout ratio at 2.80% vs. three-year average at 4.49%. Net institutional shares purchased over the current quarter at 3.9M, which is 5.46% of the company's 71.44M share float. It has been a rough couple of days for the stock, losing 14.9% over the last week.

*Dividend per share and payout ratio data sourced from Screener.co, institutional data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 4 Smart Money Picks With Rising Dividends And Falling Payout Ratios