6 Hedge Fund Dividend Stock Picks With Impressive Profitability

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Includes: IHG, INDB, MTSC, RES, SEE, SYA
by: Kapitall

Looking for stocks paying dividend income? If so, here are some ideas to get started on your search.

We ran a screen on dividend stocks seeing significant net institutional purchases over the current quarter, indicating that institutional investors such as hedge fund managers expect these stocks to outperform. We then screened these names for those with impressive profitability, beating their industry peers on gross, operating, and pretax margins.

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 will outperform like institutional investors expect? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. RPC Inc. (NYSE:RES): Provides a range of oilfield services and equipment to the oil and gas companies primarily in the United States. Dividend yield at 3.13%, payout ratio at 15.98%. Net institutional purchases in the current quarter at 1.7M shares, which represents about 3.46% of the company's float of 49.15M shares. TTM gross margin at 45.15% vs. industry average at 34.79%. TTM operating margin at 26.85% vs. industry average at 18.11%. TTM pretax margin at 26.46% vs. industry average at 16.02%.

2. Independent Bank Corp. (NASDAQ:INDB): Operates as the bank holding company for Rockland Trust Company that provides commercial and retail banking, and wealth management services in Massachusetts. Dividend yield at 2.62%, payout ratio at 35.88%. Net institutional purchases in the current quarter at 752.1K shares, which represents about 3.68% of the company's float of 20.42M shares. TTM gross margin at 83.84% vs. industry average at 71.26%. TTM operating margin at 41.43% vs. industry average at 40.65%. TTM pretax margin at 25.19% vs. industry average at 22.04%.

3. Sealed Air Corporation (NYSE:SEE): Manufactures and sells packaging and performance-based materials and equipment systems worldwide. Dividend yield at 2.54%, payout ratio at 33.84%. Net institutional purchases in the current quarter at 6.2M shares, which represents about 3.29% of the company's float of 188.35M shares. TTM gross margin at 30.06% vs. industry average at 22.48%. TTM operating margin at 11.71% vs. industry average at 9.35%. TTM pretax margin at 6.84% vs. industry average at 5.37%.

4. Symetra Financial Corporation (NYSE:SYA): Operates as a financial services company in the life insurance industry in the United States. Dividend yield at 2.43%, payout ratio at 13.13%. Net institutional purchases in the current quarter at 15.6M shares, which represents about 13.04% of the company's float of 119.61M shares. TTM gross margin at 15.56% vs. industry average at 13.92%. TTM operating margin at 15.56% vs. industry average at 10.84%. TTM pretax margin at 13.96% vs. industry average at 9.73%.

5. Intercontinental Hotels Group plc (NYSE:IHG): Owns, manages, franchises, and leases hotels and resorts. Dividend yield at 2.37%, payout ratio at 38.64%. Net institutional purchases in the current quarter at 10.3M shares, which represents about 3.66% of the company's float of 281.09M shares. TTM gross margin at 55.88% vs. industry average at 35.6%. TTM operating margin at 29.34% vs. industry average at 18.75%. TTM pretax margin at 27.28% vs. industry average at 17.88%.

6. MTS Systems Corp. (NASDAQ:MTSC): Supplies test systems and industrial position sensors in the Americas, Europe, and Asia. Dividend yield at 2.06%, payout ratio at 26.47%. Net institutional purchases in the current quarter at 561.6K shares, which represents about 3.78% of the company's float of 14.84M shares. TTM gross margin at 45.81% vs. industry average at 35.38%. TTM operating margin at 15.81% vs. industry average at 9.19%. TTM pretax margin at 15.86% vs. industry average at 9.35%.

*Institutional and profitability 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.