In the wake of so much economic uncertainty, dividend investing has seen something of a revival these past few years. With a reputation for stability, not to mention compound interest and the steady stream of income they offer, dividend payers suddenly became a lot more attractive, particularly to those investors still licking their financial wounds.
But while stocks seeing high dividend yields may very well hold great potential for profit, they're not without substantial risk.
Because it's a comparative measure, high dividend yield doesn't necessarily mean outsized payouts in investors' pockets.
Dividend yield is a ratio comparing annual dividends per share to price per share -- when a stock price declines, dividend yield moves higher. So an elevated dividend yield could merely be an indicator of depressed share price. And when a stock's price is on the decline, there's often a very good reason.
So how can you tell which high-yielding dividend payers are worth venturing a bet on? There's no way to know for certain, but seeing what the smart money is up to can offer some clues.
Institutional investors have the time and resources to do their homework, and they usually have the skills to know when potential dividend returns outweigh the risks.
Here's a list of high-yield dividend stocks that have seen significant institutional inflows over the past two quarters. Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
|
Company |
Industry |
Dividend Yield |
Net Institutional Trades Over Last 2 Quarters |
Net Mutual Fund Trades Over Last 2 Quarters |
|---|---|---|---|---|
|
Atlantic Power |
Electric utilities |
7.15% |
On a net basis, institutional investors bought 1.1M shares during the current quarter, vs. 8.0M shares purchased in the prior quarter. |
On a net basis, mutual fund investors bought 161.6K shares during the current quarter, vs. 90.5K shares purchased in the prior quarter. |
|
Niska Gas Storage Partners |
Gas utilities |
6.85% |
On a net basis, institutional investors bought 17.8M shares during the current quarter, vs. 1.0M shares purchased in the prior quarter. |
On a net basis, mutual fund investors bought 1.3M shares during the current quarter, vs. 2.1M shares purchased in the prior quarter. |
|
Suburban Propane Partners |
Gas utilities |
6.14% |
On a net basis, institutional investors bought 397.4K shares during the current quarter, vs. 1.2M shares purchased in the prior quarter. |
On a net basis, mutual fund investors bought 225.8K shares during the current quarter, vs. 331.4K shares purchased in the prior quarter. |
|
Euroseas |
Shipping |
5.63% |
On a net basis, institutional investors bought 613.6K shares during the current quarter, vs. 404.8K shares purchased in the prior quarter |
On a net basis, mutual fund investors bought 8.8K shares during the current quarter, vs. 25.5K shares purchased in the prior quarter |
|
Southern Copper |
Copper |
4.58% |
On a net basis, institutional investors bought 2.1M shares during the current quarter, vs. 2.7M shares purchased in the prior quarter. |
On a net basis, mutual fund investors bought 111.1K shares during the current quarter, vs. 2.0M shares purchased in the prior quarter. |
|
Garmin |
Scientific & technical instruments |
4.39% |
On a net basis, institutional investors bought 8.0M shares during the current quarter, vs. 9.8M shares purchased in the prior quarter. |
On a net basis, mutual fund investors bought 1.3M shares during the current quarter, vs. 2.8M shares purchased in the prior quarter. |
|
Cinemark Holdings |
Movie production, theaters |
4.35% |
On a net basis, institutional investors bought 12.7M shares during the current quarter, vs. 2.3M shares purchased in the prior quarter. |
On a net basis, mutual fund investors bought 4.1M shares during the current quarter, vs. 3.1M shares purchased in the prior quarter. |
Source: Fidelity. The list has been sorted by dividend yield.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.
Disclosure: Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.
