11 Dividend Stocks That Meet Hedge Fund`s Requirement
0.86%December 16 | MyPlanIQ portfolio symbol P_37802

As we continue to look for ideas for dividend bearing stocks, a Kapitall interview of Neil Hennessy, Portfolio Manager and Chief Investment Officer of The Hennessy Mutual Funds, was interesting. He said one of his investing strategies was to choose companies with price to sales ratios below 1.5.

Rebecca Lipman  used this as a starting point to create a list that meets the following requirements:
- Price to Sales ratio below 1.5 (One dollar of sales in return for at least $1.50 in sales)
- Dividend yields between 3-7%
- Net institutional buying in the current quarter
- Market cap above $300 million

I am always interested in a blind filter to see how it performs. I think that $300M is pretty much the lowest you would ever want to go in looking for a dividend bearing stock and all of these are going to be small cap stocks.

• Energy Transfer Equity, L.P. (ETE): Midstream, intrastate, and interstate transportation and storage of natural gas. Market cap at $8.9B. Dividend yield at 6.27%.
• Cinemark Holdings Inc. (CNK): Motion picture business. Market cap at $2.57B. Dividend yield at 3.75%.
• DCP Midstream Partners LP (DPM): Processing, transporting, storing, and selling natural gas in the United States. Market cap at $1.83B. Dividend yield at 5.71%.
• UIL Holdings Corporation (UIL): Operates in the energy sector in the United States. Market cap at $1.7B. Dividend yield at 5.16%.
• SUPERVALU Inc. (SVU): Operates retail food stores in the United States. Market cap at $1.29B. Dividend yield at 5.76%. Net institutional purchases in the current quarter at 18.2M shares, which represents about 8.66% of the company’s float of 210.07M shares.
• MDC Holdings Inc. (MDC): Engages in homebuilding and financial services businesses in the United States. Market cap at $1.24B. Dividend yield at 3.87%.
• Genesis Energy LP (GEL): Operates in the oil and gas industry in the Gulf Coast area of the United States. Market cap at $1.23B. Dividend yield at 5.78%.
• Spreadtrum Communications Inc. (SPRD): Operates as a fabless semiconductor company for wireless communications and mobile television markets. Market cap at $606.34M. Dividend yield at 3.03%.
• Maiden Holdings, Ltd. (MHLD): Provides non-catastrophe inland marine and property coverage reinsurance in the United States and Europe. Market cap at $595.09M. Dividend yield at 3.88%.
• FutureFuel Corp. (FF): Specialty chemicals and bio-based products primarily in the United States. Market cap at $428.08M. Dividend yield at 3.86%.
• Hot Topic Inc. (HOTT): Operates as a mall- and Web-based specialty retailer in the United States. Market cap at $417.01M. Dividend yield at 3.23%.

None of these are big companies and we have four energy companies in the mix: Energy Transfer. In order for this not to be unbalanced, I will halve the amount of money invested in each of the energy companies so that we diversify into the different companies without overloading the selection from the energy sector.

It will be interesting to measure them with our dividend bearing ETF portfolio: