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One strategy for enhancing equity returns is to "get there early" by buying stocks that institutional investors have not bought into. The strategy is implemented by first buying a stock with little institutional ownership, then waiting for the stock to attract attention among institutional investors. These large buyers would move the price of the stock up as they buy many outstanding shares. Restricting this strategy to dividend-yielding stocks would pay investors to wait for institutional buyers to become interested in stocks.

The following screen was performed to find dividend-paying stocks with relatively little institutional ownership:

Low institutional ownership. Each of the following stocks has a maximum institutional ownership of 30%.

Dividend yield. Each stock pays a dividend yield of at least 2%, which is in excess of the 10-year treasury bond and the dividend yield of the S&P 500 (NYSEARCA:SPY).

Dividend growth. Each of these stocks had over a 5% average annual increase in dividend payments over the past 10 years. Thus, each of these dividend stocks has a long-term trend of dividend growth, which is better than the static interest payments on fixed-rate treasuries.

Ticker

Company

Industry

Institutional Ownership

ALOT

Astro-Med Inc.

Computer Peripherals

30.0%

ETP

Energy Transfer Partners LP

Oil & Gas Pipelines

20.0%

GNI

Great Northern Iron Ore Properties

Steel & Iron

4.9%

KOSS

Koss Corp.

Electronic Equipment

11.7%

MDP

Meredith Corp.

Publishing - Periodicals

0.0%

MLM

Martin Marietta Materials Inc.

General Building Materials

0.0%

RES

RPC Inc.

Oil & Gas Equipment & Services

28.2%

TNH

Terra Nitrogen Company, L.P.

Agricultural Chemicals

5.9%

UG

United-Guardian Inc.

Personal Products

14.9%

WSO

Watsco Inc.

Electronics Wholesale

1.0%

WWVY

Warwick Valley Telephone Company

Telecom Services - Domestic

27.6%

Price multiples, dividend histories, and return on equity histories are provided below:

Astro-Med Inc. recently traded at $8.09 per share. At this price level, the stock has a 3.5% dividend yield. For 10 out of the past 10 fiscal years, a share of ALOT paid a total of $1.76 in dividends. Of these dividend payments, a total of $1.14 was paid in the last five years.

ALOT shareholders have seen a 6.3% change in share price over the past year. Shares of this micro-cap stock trade at a price-to-book ratio of 1.1, a price-to-earnings multiple of 21.3, and a price-to-sales multiple of 0.8 (trailing twelve months). Over the past decade shareholders enjoyed a 5.4% average annual return on equity.

Energy Transfer Partners LP recently traded at $48.32 per share. At this price level, the stock has a 7.4% dividend yield. For 10 out of the past 10 fiscal years, a share of ETP paid a total of $23.25 in dividends. Of these dividend payments, a total of $16.33 was paid in the last five years.

ETP shareholders have seen a 5.4% change in share price over the past year. Shares of this mid cap-stock trade at a price-to-book ratio of 2.0, a price-to-earnings multiple of 35.8, and a price-to-sales multiple of 1.4 (trailing twelve months). Over the past decade shareholders saw a 17.1% average annual return on equity.

Great Northern Iron Ore Properties recently traded at $120.46 per share. At this price level, the stock has a 12.5% dividend yield. For 10 out of the past 10 fiscal years, a share of GNI paid a total of $88.75 in dividends. Of these dividend payments, a total of $52.25 was paid in the last five years.

GNI shareholders have seen a 9.3% change in share price over the past year. Shares of this micro-cap stock trade at a price-to-book ratio of 14.7, a price-to-earnings multiple of 8.5, and a price-to-sales multiple of 7.3 (trailing twelve months). Over the past decade shareholders saw a 98.6% average annual return on equity.

Koss Corp. recently traded at $5.85 per share. At this price level, the stock has a 4.1% dividend yield. For 10 out of the past 10 fiscal years, a share of KOSS paid a total of $1.48 in dividends. Of these dividend payments, a total of $0.84 was paid in the last five years.

KOSS shareholders have seen a 17.0% change in share price over the past year. Shares of this nano-cap stock trade at a price-to-book ratio of 2.8, a price-to-earnings multiple of 10.6, and a price-to-sales multiple of 1.1 (trailing twelve months). Over the past decade shareholders saw a 19.6% average annual return on equity.

Meredith Corp. recently traded at $31.97 per share. At this price level, the stock has a 4.8% dividend yield. For 10 out of the past 10 fiscal years, a share of MDP paid a total of $6.52 in dividends. Of these dividend payments, a total of $4.25 was paid in the last five years.

MDP shareholders have seen a -2.1% change in share price over the past year. At present, shares of this small-cap stock trade at a price-to-book ratio of 1.8, a price-to-earnings multiple of 11.5, and a price-to-sales multiple of 1.1 (trailing twelve months). Over the past decade shareholders saw a 13.2% average annual return on equity.

Martin Marietta Materials Inc. recently traded at $80.9 per share. At this price level, the stock has a 2.0% dividend yield. For 10 out of the past 10 fiscal years, a share of MLM paid a total of $10.39 in dividends.

MLM shareholders have seen a 7.3% change in share price over the past year. Shares of this mid-cap stock trade at a price-to-book ratio of 2.6, a price-to-earnings multiple of 44.9, and a price-to-sales multiple of 2.0 (trailing twelve months). Over the past decade shareholders saw a 13.0% average annual return on equity.

RPC Inc. recently traded at $17.89 per share. At this price level, the stock has a 2.2% dividend yield. For 10 out of the past 10 fiscal years, a share of RES paid a total of $0.80 in dividends. Of these dividend payments, a total of $0.67 was paid in the last five years.

RES shareholders have seen a -2.0% change in share price over the past year. Shares of this mid-cap stock trade at a price-to-book ratio of 3.7, a price-to-earnings multiple of 9.5, and a price-to-sales multiple of 1.6 (trailing twelve months). Over the past decade shareholders saw a 17.2% average annual return on equity.

Terra Nitrogen Company, L.P. recently traded at $188.52 per share. At this price level, the stock has a 7.4% dividend yield. For 10 out of the past 10 fiscal years, a share of TNH paid a total of $44.36 in dividends. Of these dividend payments, a total of $38.57 was paid in the last five years.

TNH shareholders have enjoyed a 12.3% change in share price over the past year. Shares of this mid-cap stock trade at a price-to-book ratio of 13.1, a price-to-earnings multiple of 13.4, and a price-to-sales multiple of 4.7 (trailing twelve months). Over the past decade shareholders saw a 44.6% average annual return on equity.

United-Guardian Inc. recently traded at $16.02 per share. At this price level, the stock has a 5.0% dividend yield. For 10 out of the past 10 fiscal years, a share of UG paid a total of $3.30 in dividends. Of these dividend payments, a total of $2.55 was paid in the last five years.

UG shareholders have seen a 5.1% change in share price over the past year. Shares of this micro-cap stock trade at a price-to-book ratio of 4.9, a price-to-earnings multiple of 16.0, and a price-to-sales multiple of 5.4 (trailing twelve months). Over the past decade shareholders saw a 21.5% average annual return on equity.

Watsco Inc. recently traded at $67.3 per share. At this price level, the stock has a 3.7% dividend yield. For 10 out of the past 10 fiscal years, a share of WSO paid a total of $9.36 in dividends. Of these dividend payments, a total of $7.94 was paid in the last five years.

WSO shareholders have seen a 3.4% change in share price over the past year. Shares of this mid-cap stock trade at a price-to-book ratio of 2.8, a price-to-earnings multiple of 25.3, and a price-to-sales multiple of 0.7 (trailing twelve months). Over the past decade shareholders saw a 11.3% average annual return on equity.

Warwick Valley Telephone Company recently traded at $13.05 per share. At this price level, the stock has a 8.0% dividend yield. For 10 out of the past 10 fiscal years, a share of WWVY paid a total of $7.68 in dividends. Of these dividend payments, a total of $4.24 was paid in the last five years.

WWVY shareholders have seen a -0.3% change in share price over the past year. Shares of this micro-cap stock trade at a price-to-book ratio of 2.3 and a price-to-sales multiple of 3.0 (trailing twelve months). Over the past decade shareholders saw a 17.9% average annual return on equity.

Of these stocks, RES and MDP trade at the most attractive valuations. Investors should consider adding these two stocks to their income portfolio while periodically monitoring the other stocks on this list for more attractive valuations.

Source: Dividends Under The Radar