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When investors choose dividend-yielding stocks, they have two ways to earn money - from the stock's performance and from the dividends the stock yields. The dividend amount will vary dramatically between companies and there are various factors to consider, like the tax implications of collecting dividends and the consistency of dividend payouts - in other words, picking a dividend-yielding stock is not as easy as looking solely at the yield percentage.

Whether an investor wants to use the dividends as income or reinvest them, finding a stock that will consistently perform well while offering consistent dividends is critical to managing any investment portfolio. For example, a stock like the Coca-Cola Company (NYSE:KO) has been consistently providing dividends, and consistently increasing them, for the last few decades.

To give investors an idea what to look for, we compiled a list of stocks with dividend yields over 4%. Then, we narrowed the list to look only at those stocks that pay out less than 50% of their profits as dividends ("payout ratio"). Next, we looked at the number of stocks that had the highest percentage of institutional ownership. Hedge fund holdings are obtained from Insider Monkey.

Atlantic Power Corporation (NYSE:AT) is an electric utilities company with a $4.90 billion market cap. It pays a 7.92% dividend yield and has 60.67% institutional ownership. AT is currently trading at 19.57 times its earnings and is priced at $14.15 a share. Jim Simons' Renaissance Technologies had over $3.49 million in AT at the end of September after increasing its holding in the company by +51% in the third quarter. D.E. Shaw's D E Shaw is also a fan of AT. The fund upped its position in the company by +55% during the third quarter, to $549,000.

Chesapeake Midstream Partners, LP (CHKM) is an oil and gas refining company with a $4.25 billion market cap. It pays a 4.98% dividend yield and has 56.70% institutional ownership. CHKM is currently trading at 5.35 times its earnings and is priced at $30.15 a share. Jim Simons' Renaissance Technologies initiated a new $851,000 position in CHKM during the third quarter. Cliff Asness' AQR Capital Management was also bullish on the company, opening a $236,000 position in CHKM during the third quarter.

Entergy Corporation (NYSE:ETR) is an electric utilities company with a $12.66 billion market cap. It pays a 4.62% dividend yield and has 81.63% institutional ownership. ETR is currently trading at 9.06 times its earnings and is priced at $71.81 a share. Jean-Marie Eveillard's First Eagle Investment Management increased its position in ETR by +46% during the third quarter, bringing its total stake in the company to $215.07 million at the end of September. Cliff Asness' AQR Capital Management and Glenn Russell Dubin's Highbridge Capital Management also increased their holdings in ETR during the third quarter.

H&R Block, Inc. (NYSE:HRB) is a tax services provider with a $4.76 billion market cap. It pays a 4.93% dividend yield and has 92.10% institutional ownership. HRB is currently trading at 12.21 times its earnings and is priced at $16.22 a share. Andreas Halvorsen's Viking Global had $317.72 million in HBR after upping its holding in the company by +18% during the third quarter. David Abrams' Abrams Capital Management is also a fan of HRB. It had $103.87 million in the company at the end of the third quarter.

Eli Lilly & Co. (NYSE:LLY) is a major drug manufacturer with a $46.66 billion market cap. It pays a 4.86% dividend yield and has 75.50% institutional ownership. LLY is currently trading at 9.62 times its earnings and is priced at $40.02 a share. Jim Simons' Renaissance Technologies had $262.47 million in LLY at the end of the third quarter, roughly 1.1% of its portfolio. Ron Gutfleish's Elm Ridge Capital and Cliff Asness' AQR Capital Management are also fans of LLY.

Lockheed Martin Corporation (NYSE:LMT) is an aerospace and defense company with a $25.91 billion market cap. It pays a 5.00% dividend yield and has 91.59% institutional ownership. LMT is currently trading at 10.05 times its earnings and is priced at $79.79 a share. Jean-Marie Eveillard's First Eagle Investment Management had $273.66 million invested in LMT at the end of September after increasing its holding in the company by +10% during the third quarter. John Shapiro's Chieftain Capital and Ron Gutfleish's Elm Ridge Capital increased their positions in the company as well.

NYSE Euronext, Inc. (NYSE:NYX) is a diversified investments company with a $7.11 billion market cap. It pays a 4.42% dividend yield and has 72.73% institutional ownership. NYX is currently trading at 11.07 times its earnings and is priced at $26.91 a share. Robert Emil Zoellner's Alpine Associates had $57.73 million in NYX at the end of September after upping its position in the company by +52%, while Jean-Marie Eveillard's First Eagle Investment Management and Jeffrey Tannenbaum's Fir Tree each initiated new positions in the company during the third quarter.



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

Source: 7 Dividend Stocks With Low Payout, High Institutional Ownership