If you like to follow the buying trends of “smart money” investors such as hedge funds, here are some ideas to get you started.
We ran a screen on stocks paying big dividend yields above 3% and sustainable payout ratios below 50% for those seeing the most significant net institutional purchases over the current quarter, expressed as a percent of share float.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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.
(Click to enlarge)
Do you think these stocks pay reliable dividend yields? Use this list as a starting point for your own analysis.
List sorted by dividend yield.
1. SK Telecom Co. Ltd. (SKM): Provides wireless telecommunications services using code division multiple access (CDMA) and wide-band CDMA technologies. Market cap of $9.29B. Dividend yield at 6.98%, payout ratio at 48.82%. Net institutional shares purchased over the current quarter at 89.2M, which is 24.78% of the company's 360.01M share float. The stock has lost 24.07% over the last year.
2. Williams Companies, Inc. (WMB): Engages in finding, producing, gathering, processing, and transporting natural gas primarily in the United States. Market cap of $17.92B. Dividend yield at 3.29%, payout ratio at 37.77%. Net institutional shares purchased over the current quarter at 35.0M, which is 5.96% of the company's 587.29M share float. The stock has gained 32% over the last year.
3. j2 Global, Inc. (JCOM): Provides outsourced, value-added communication, messaging, and data backup services to businesses of all sizes, from individuals to enterprises worldwide. Market cap of $1.24B. Dividend yield at 3.15%, payout ratio at 8.59%. Net institutional shares purchased over the current quarter at 2.3M, which is 5.17% of the company's 44.53M share float. The stock is a short squeeze candidate, with a short float at 16.94% (equivalent to 16.14 days of average volume). The stock has performed poorly over the last month, losing 11.52%.
4. Ternium S.A. (TX): Engages in manufacturing and processing a range of flat and long steel products for construction, home appliances, capital goods, container, food, energy, and automotive industries. Market cap of $3.48B. Dividend yield at 4.33%, payout ratio at 10.31%. Net institutional shares purchased over the current quarter at 2.3M, which is 4.71% of the company's 48.88M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.21). The stock has performed poorly over the last month, losing 32.79%.
5. MicroFinancial Inc. (MFI): Operates as a specialized commercial finance company that provides microticket equipment leasing and rental, and other financing services in the United States. Market cap of $81.28M. Dividend yield at 4.21%, payout ratio at 36.64%. Net institutional shares purchased over the current quarter at 261.5K, which is 4.04% of the company's 6.48M share float. The stock has gained 49.21% over the last year.
6. Janus Capital Group, Inc. (JNS): A publicly owned asset management holding company. Market cap of $1.11B. Dividend yield at 3.37%, payout ratio at 10.75%. Net institutional shares purchased over the current quarter at 6.9M, which is 3.83% of the company's 180.09M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.55). Might be undervalued at current levels, with a PEG ratio at 0.82, and P/FCF ratio at 4.7. It's been a rough couple of days for the stock, losing 6.76% over the last week.
7. Whirlpool Corp. (WHR): Engages in the manufacture and marketing of home appliances worldwide. Market cap of $3.56B. Dividend yield at 4.29%, payout ratio at 39.71%. Net institutional shares purchased over the current quarter at 2.8M, which is 3.69% of the company's 75.98M share float. The stock has performed poorly over the last month, losing 11.94%.
8. Harte-Hanks Inc. (HHS): Operates as a direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to local, regional, national, and international customer and business-to-business marketers. Market cap of $596.16M. Dividend yield at 3.54%, payout ratio at 44.59%. Net institutional shares purchased over the current quarter at 1.6M, which is 3.68% of the company's 43.53M share float. The stock has lost 25.22% over the last year.
9. Intercontinental Hotels Group plc (IHG): Owns, manages, franchises, and leases hotels and resorts. Market cap of $4.82B. Dividend yield at 3.08%, payout ratio at 38.64%. Net institutional shares purchased over the current quarter at 10.0M, which is 3.56% of the company's 281.09M share float. The stock has lost 6.05% over the last year.
*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.
