With the markets as volatile as ever, thanks chiefly to the worries surrounding the Eurozone, investors are bailing out of many of their equity positions and staying in cash or fixed income. However, for income investors, this most recent correction could signal a great opportunity to collect some sizable dividend yields at sale prices.

While the universe of dividend-paying stocks is big enough to make it difficult for potential investors to know where to begin, the fact that the number of "high-yield" stocks just got even bigger thanks to the recent plunge in equities makes it even tougher. One strategy to help investors get started in analyzing potential stocks is to follow the smart money. By searching out high-yield stocks with high levels of institutional ownership investors can see which dividend paying companies money managers are betting on.

IN PICTURES: World's Greatest Investors

With that in mind, here are five stocks with sizable current dividend yields that have a large institutional ownership presence:

Company Current Dividend Yield Institutional
Ownership
Pitney Bowes (NYSE:PBI) 6.7 % 88%
CenturyTel (NYSE:CTL) 8.7% 72%
EarthLink (Nasdaq:ELNK) 7.5% 95%
FirstEnergy (NYSE:FE) 6.3% 64%
National Retail Properties (NYSE:NNN) 7.0% 84%

Printing Money
Of the stocks listed above, I would lead investors to take a closer look at Pitney Bowes. The Connecticut-based office supply/equipment/services company competes in the same space as Xerox (NYSE:XRX), and offer potential investors a 6.7% yield, currently 36.5 cents per share quarterly. Although PBI has suffered as much as any other firm during this most recent slide in the global markets (down 12% since May 3, 2010), its fundamentals are solid. Not only has it provided earnings beats in each of the last three quarters, but management recently reaffirmed guidance for the rest of 2010, where they are expecting adjusted EPS to be in the range of 2.30-2.50. Add to this that the board of directors voted to approve a share repurchase of $150 million to be used in the next 12-18 months. However, with shares hovering near their 52-week low, buying back now could end up being a very wise move.

Pitney Bowes management is also excited about the company's expansion into value-added services, which they hope will provide higher margins and increase customer loyalty in the coming years. If this new service strategy is successful it could act as the fuel for the firm's earnings growth over the next three to five years. To add to the fundamentals, keep in mind that 88% of PBI's float is owned by institutional investors. (For more dividend paying stock ideas, check out Big Energy Dividends.)

The Bottom Line
By searching out stocks that professional money managers are holding, investors can create a list of potential buys. Pitney Bowes is definitely the most intriguing company on this list, but the other firms may appeal to other investors for a variety of reasons. Investors should perform their due-diligence on these and all stocks before making an investment decision. (For more potential picks, see Look To Semiconductors For Earnings Growth.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    How Toyota Succeeds at Home and Abroad (TM)

    Japan's biggest car manufacturer is also one of North America's biggest, delighting shareholders with its high profit margins.
  2. Stock Analysis

    Starbucks: Profiting One Cup at a Time (SBUX)

    Starbucks is everywhere. But is it a worthwhile business? Ask the shareholders who've made it one of the world's most successful companies.
  3. Stock Analysis

    How Medtronic Makes Money (MDT)

    Here's the story of an American medical device firm that covers almost every segment in medicine and recently moved to Ireland to pay less in taxes.
  4. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  5. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  6. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  7. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  8. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  9. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  10. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center