6 Highly Liquid Dividend Stocks Being Snapped Up By Hedge Funds

by: Kapitall

Do you prefer stocks that pay reliable dividend income? For ideas on how to start your search, we ran a screen.

We began by screening for stocks paying dividend yields above 1% and sustainable payout ratios below 50%. We then screened for those with strong liquidity, which can help support a dividend when profitability lags, with current ratios above 3.

Finally, we screened for stocks 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 top six 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 names pay reliable dividend income? 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 2.40%, payout ratio at 23.07%. Current ratio at 4.67. Net institutional purchases in the current quarter at 2.0M shares, which represents about 3.84% of the company's float of 52.02M shares.

2. FactSet Research Systems Inc. (NYSE:FDS): Provides financial and economic information to investment community worldwide. Dividend yield at 1.08%, payout ratio at 27.71%. Current ratio at 3.22. Net institutional purchases in the current quarter at 1.8M shares, which represents about 4.33% of the company's float of 41.53M shares.

3. 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 3.67%, payout ratio at 24.29%. Current ratio at 7.16. Net institutional purchases in the current quarter at 1.1M shares, which represents about 9.93% of the company's float of 11.08M shares.

4. GNC Corp. (NYSE:GNC): Operates as a specialty retailer of health and wellness products. Dividend yield at 1.31%, payout ratio at 0.15%. Current ratio at 3.06. Net institutional purchases in the current quarter at 12.9M shares, which represents about 16.29% of the company's float of 79.18M shares.

5. j2 Global Communications, Inc. (NASDAQ:JCOM): Provides outsourced, value-added communication, messaging, and data backup services to businesses of all sizes, from individuals to enterprises worldwide. Dividend yield at 2.79%, payout ratio at 16.97%. Current ratio at 3.68. Net institutional purchases in the current quarter at 3.9M shares, which represents about 8.58% of the company's float of 45.47M shares.

6. Mesa Laboratories Inc. (NASDAQ:MLAB): Designs, manufactures, and markets instruments and disposable products utilized primarily in healthcare, pharmaceutical, food and beverage, medical device, and petrochemical industries. Dividend yield at 1.03%, payout ratio at 20.74%. Current ratio at 3.77. Net institutional purchases in the current quarter at 81.9K shares, which represents about 3.43% of the company's float of 2.39M shares.

*Institutional data sourced from Yahoo! Finance, 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.