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Institutional investors like hedge fund managers and mutual fund managers regularly report the securities that they buy, and this information is very interesting to other investors because institutions are seen as very knowledgeable. When a stock sees net buying from institutional investors, it’s a signal to take a second look.

We ran a screen on dividend stocks with high liquidity, measured by a current ratio greater than 3, indicating dividend reliability. We screened these stocks for those with net buying from institutional investors 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.

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

List sorted by net institutional shares purchased as a percent of share float.

1. Haynes International Inc. (HAYN): Develops, manufactures, markets and distributes high-performance nickel-and cobalt-based alloys in sheet, coil, and plate forms for use in the various industries worldwide. Market cap of $711.23M. Dividend yield at 1.37%, payout ratio at 38.48%. Current ratio at 4.23. Net institutional shares purchased over the current quarter at 1.2M, which is 10.05% of the company's 11.94M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.39). The stock is a short squeeze candidate, with a short float at 5.77% (equivalent to 5.31 days of average volume). It has been a rough couple of days for the stock, losing 8.51% over the last week. The stock has had a good month, gaining 17.2%.

2. Communications Systems Inc. (JCS): Manufactures and sells modular connecting and wiring devices and media and rate conversion products. Market cap of $135.22M. Dividend yield at 3.98%, payout ratio at 40.17%. Current ratio at 5.73. Net institutional shares purchased over the current quarter at 233.3K, which is 4.04% of the company's 5.77M share float. The stock is a short squeeze candidate, with a short float at 5.23% (equivalent to 8.82 days of average volume). The stock has had a good month, gaining 16.91%.

3. LeMaitre Vascular, Inc. (LMAT): Develops, manufactures and markets vascular devices for the treatment of peripheral vascular disease worldwide. Market cap of $88.20M. Dividend yield at 1.41%, payout ratio at 24.69%. Current ratio at 4.35. Net institutional shares purchased over the current quarter at 334.2K, which is 3.99% of the company's 8.38M share float. It has been a rough couple of days for the stock, losing 5.17% over the last week.

4. Hillenbrand, Inc. (HI): Manufactures, distributes and sells funeral service products to licensed funeral directors operating licensed funeral homes. Market cap of $1.36B. Dividend yield at 3.51%, payout ratio at 45.47%. Current ratio at 3.71. Net institutional shares purchased over the current quarter at 1.8M, which is 3.09% of the company's 58.26M share float. The stock is a short squeeze candidate, with a short float at 5.26% (equivalent to 8.57 days of average volume). The stock has had a good month, gaining 15.05%.

*Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: 4 Highly Liquid Dividend Stocks Being Bought By Hedge Funds