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Do you prefer stocks that pay steady dividend income? We ran a screen with dividend sustainability in mind.

We began by screening for highly liquid dividend stocks: those paying dividend yields above 2%, sustainable payout ratios below 50%, and those with current ratios above 3. The current ratio is current assets/current liabilities, so ratios above 3 indicate the company has at least 3 times the liquid assets to cover their short-term liabilities.

We then screened for stocks with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform in the future.

For an ‪interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

click for interactive chart

Tool provided by Kapitall (www.kapitall.com).

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

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

1. Sturm, Ruger & Co. Inc. (NYSE:RGR): Engages in the design, manufacture, and sale of firearms in the United States. Market cap at $844M, most recent closing price at $44.05. Dividend yield at 2.42%, payout ratio at 28.60%. Current ratio at 3.32. Net institutional purchases in the current quarter at 2.6M shares, which represents about 14.87% of the company's float of 17.49M shares.

2. j2 Global, Inc. (NASDAQ:JCOM): Provides outsourced, value-added communication, messaging, and data backup services to businesses of all sizes, from individuals to enterprises worldwide. Market cap at $1.33B, most recent closing price at $29.20. Dividend yield at 3.04%, payout ratio at 34.42%. Current ratio at 3.34. Net institutional purchases in the current quarter at 3.1M shares, which represents about 7.24% of the company's float of 42.84M shares.

3. Resources Connection Inc. (NASDAQ:RECN): Provides professional services in provides finance, accounting, risk management and internal audit, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, actuarial, and legal and regulatory services in support of client-led projects and initiatives. Market cap at $503.04M, most recent closing price at $11.98. Dividend yield at 2.07%, payout ratio at 20.87%. Current ratio at 3.7. Net institutional purchases in the current quarter at 2.7M shares, which represents about 6.66% of the company's float of 40.52M shares.

4. Kronos Worldwide Inc. (NYSE:KRO): Engages in the production and marketing of titanium dioxide pigments in North America and Europe. Market cap at $2.11B, most recent closing price at $18.24. Dividend yield at 3.31%, payout ratio at 18.65%. Current ratio at 3.03. Net institutional purchases in the current quarter at 1.2M shares, which represents about 6.13% of the company's float of 19.57M shares.

5. RPC Inc. (NYSE:RES): Provides a range of oilfield services and equipment to the oil and gas companies primarily in the United States. Market cap at $2.82B, most recent closing price at $12.86. Dividend yield at 2.49%, payout ratio at 19.87%. Current ratio at 3.58. Net institutional purchases in the current quarter at 4.5M shares, which represents about 6.12% of the company's float of 73.55M shares.

6. True Religion Apparel Inc. (NASDAQ:TRLG): Designs, develops, manufactures, markets, distributes, and sells apparel in North America, Europe, Asia, Australia, Africa, and South America. Market cap at $581.82M, most recent closing price at $22.56. Dividend yield at 3.52%, payout ratio at 22.06%. Current ratio at 7.8. Net institutional purchases in the current quarter at 1.2M shares, which represents about 5.02% of the company's float of 23.90M shares.

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

Source: 6 Highly Liquid Dividend Stocks Being Bought Up By Hedge Funds