3 Highly Liquid Dividend Stocks Hedge Funds Are Buying Up

Includes: AEA, FF, JAKK
by: Kapitall

Interested in stocks paying dividend income but don't know where to start? Here are some ideas on how to begin your search.

We ran a screen on stocks paying dividend yields above 2% and sustainable payout ratios below 50% for those with strong company liquidity, with current ratios above 3. We then screened for those seeing significant net institutional purchases over the current quarter, indicating institutional investors such as hedge fund managers expect these names to outperform.

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 hedge funds expect? Use this list as a starting point for your own analysis.

1. Advance America, Cash Advance Centers Inc. (NYSE:AEA): Provides cash advance services in the United States, the United Kingdom, and Canada. Dividend yield at 2.41%, payout ratio at 27.68%. Current ratio at 5. Net institutional purchases in the current quarter at 6.6M shares, which represents about 12.67% of the company's float of 52.11M shares.

2. FutureFuel Corp. (NYSE:FF): Engages in the manufacture and sale of specialty chemicals and bio-based products primarily in the United States. Dividend yield at 3.61%, payout ratio at 24.29%. Current ratio at 7.16. Net institutional purchases in the current quarter at 1.0M shares, which represents about 9.03% of the company's float of 11.07M shares.

3. JAKKS Pacific, Inc. (NASDAQ:JAKK): Designs, produces, markets, and distributes toys and consumer products worldwide. Dividend yield at 2.66%, payout ratio at 0.00%. Current ratio at 3.07. Net institutional purchases in the current quarter at 917.9K shares, which represents about 3.82% of the company's float of 24.01M shares.

*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.