For the past couple of decades, dividend investing has gone largely overlooked as a market strategy. Typically, the companies that pay dividends are stable companies that have been around forever -- and while security is all well and good, it makes for a far less glamorous holding than say, a tech or emerging market stock.

But those who turned their noses up at these "boring" old companies may have missed out on a whole lot of profit -- according to Ned Davis Research, from 1972 to 2006 dividend-paying stocks returned an annual average of 10% versus just 4% for non-dividend payers. And plenty of other studies back up this data.

Plus, there's something to be said for the steady stream of income dividend payers provide, especially to the generation of baby boomers about to hit retirement--for them, secure and stable has never been more attractive. And they've got the buying power to singlehandedly bring the sexy back to dividend investing. Corporations have already gotten wise to the trend, with over 60% of companies in the S&P raising their dividends over the past year.

However, there's no such thing as a sure thing when it comes to investing.

While stocks with high dividend yield offer great potential for profit, they also carry a good deal of risk. Dividend yield is a ratio comparing annual dividends per share to price per share--so when a stock price declines, dividend yield actually moves higher.

Which is why it's a good idea to see what the smart money is doing -- because institutional investors are skilled enough to know when potential dividend returns outweigh the risks. (Click here to access free interactive tools to analyze these ideas.)

Here's a list of five high yield dividend stocks seeing significant institutional inflows over the last three months. The list has been sorted by the change in institutional ownership over the last three months. Institutional data sourced from Reuters.

Company

Dividend Yield

Shares Held By Institutional Investors Today

Shares Held By Institutional Investors Three Months Ago

% Change In Inst. Ownership Over Three Months

Cheniere Energy Partners (NYSE: CQP)

8.33%

1,207,142

1,088,369

10.91%

Commercial Metals Company (NYSE: CMC)

3.25%

92,104,139

89,695,770

2.69%

Global Partners (NYSE: GLP)

7.54%

4,605,788

4,491,991

2.53%

EV Energy Partners (Nasdaq: EVEP)

8.36%

5,368,805

5,259,178

2.08%

CNinsure (Nasdaq: CISG)

4.34%

21,548,192

21,110,770

2.07%

Interactive Chart: Press Play to see how market caps have changed for all the stocks mentioned above.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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