This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Hedge Funds Are Buying These 8 Cash Rich High Yield Dividend Stocks

Looking for dividend stocks practically radiating with optimism? We created a list of high yield stocks that have the bullish backing of top investors.

To create the list below we started only with the names offering a dividend yield north of 3% and market caps above $100 million for stability.

These companies also have  plenty of cash. We take a look at the past five quarters of operating expenses, and then compare the average of those to the company’s short-term investments and most recent cash on hand. A ratio of 1 means that they can cover their average expenses for the quarter without earning any income, assuming they haven’t increased operations. If the ratio is below 1, then they won’t be able to cover their costs.

We analyzed their expenses and cash/investments for companies that have a cash/operating expense ratio over 4, just to have some extra cushion.

This is especially important in uncertain times.  If sales hit the fan in a bad way, it’s important to know that these firms are liquid enough to withstand a couple rough patches. It is also a healthy sign that they could then be headed towards expansion or even increase their dividend yield.

We then looked for names with significant net purchases from institutional buyers in the current quarter.

This means institutions, such as hedge funds and pension funds, have bought a significant amount of shares. Because these firms use a lot of money to establish these positions, and often have much more sophisticated market research on hand than Main Street investors, we can assume they have done their due diligence and have good cause to feel bullish about these stocks.

Business Section: Investing Ideas

These are the results of the screen listed below – these dividend stocks have strong cash holdings. They also have the confidence of institutional buyers.

1. Two Harbors Investment Corp. ( TWO): Operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS) and related investments. Market cap at $3.42B, most recent closing price at $11.59. Dividend yield at 19.78%. Average quarterly operating expense over the last five quarters at $55.76M, vs. most recent cash and short term investments at $833.61M, implies a Cash / Avg. Operating Expense ratio at 14.95. Net institutional purchases in the current quarter at 59.6M shares, which represents about 20.28% of the company’s float of 293.85M shares.


1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs