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Do you prefer stocks that pay handsome dividends? For a closer look at high dividend yield stocks, we ran a screen.

We began by screening for high dividend yield stocks: those having dividend yields above 3% and sustainable payout ratios below 50%.

We screened for stocks that appear undervalued relative to their cash flows, indicated by high ratios of levered free cash flow/enterprise value.

Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: market cap, outstanding debt, and preferred shares. When companies have ratios of levered free cash flow/enterprise value in excess of 10%, it may indicate those companies are being undervalued.

For an ‪interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks pay sustainable dividends? Use this list as a starting point for your own analysis.

1. Baldwin & Lyons Inc. (BWINB): Engages in marketing and underwriting property and casualty insurance products primarily in the United States. Market cap at $349.89M, most recent closing price at $23.53. Levered free cash flow at $57.46M vs. enterprise value at $295.47M (implies a LFCF/EV ratio at 19.45%). Dividend yield at 4.25%, payout ratio at 37%.

2. CA Technologies (CA): Designs, develops, markets, delivers, licenses, and supports information technology (IT) management software products that operate on a range of hardware platforms and operating systems. Market cap at $10.61B, most recent closing price at $23.11. Levered free cash flow at $1.09B vs. enterprise value at $9.78B (implies a LFCF/EV ratio at 11.15%). Dividend yield at 4.33%, payout ratio at 40%.

3. FutureFuel Corp. (FF): Engages in the manufacture and sale of specialty chemicals and bio-based products primarily in the United States. Market cap at $504.23M, most recent closing price at $12.20. Levered free cash flow at $45.00M vs. enterprise value at $308.60M (implies a LFCF/EV ratio at 14.58%). Dividend yield at 3.61%, payout ratio at 42.63%.

4. Lexmark International Inc. (LXK): Develops, manufactures, and supplies printing and imaging solutions for offices. Market cap at $1.65B, most recent closing price at $25.52. Levered free cash flow at $288.06M vs. enterprise value at $1.47B (implies a LFCF/EV ratio at 19.6%). Dividend yield at 4.7%, payout ratio at 45.72%.

5. ManTech International Corporation (MANT): Provides technologies and solutions for national security programs in the United States and internationally. Market cap at $965.33M, most recent closing price at $26.09. Levered free cash flow at $202.76M vs. enterprise value at $990.90M (implies a LFCF/EV ratio at 20.46%). Dividend yield at 3.22%, payout ratio at 22%.

6. Northrop Grumman Corporation (NOC): Provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. Market cap at $16.54B, most recent closing price at $67.40. Levered free cash flow at $2.50B vs. enterprise value at $17.28B (implies a LFCF/EV ratio at 14.47%). Dividend yield at 3.26%, payout ratio at 26.77%.

7. Seagate Technology PLC (STX): Designs, manufactures, markets, and sells hard disk drives for the enterprise, client compute, and client non-compute market applications in the United States and internationally. Market cap at $12.71B, most recent closing price at $33.68. Levered free cash flow at $2.27B vs. enterprise value at $12.37B (implies a LFCF/EV ratio at 18.35%). Dividend yield at 4.51%, payout ratio at 12.55%.

8. Superior Industries International, Inc. (SUP): Designs, develops, manufactures, sells, and supplies cast aluminum road wheels to automobile and light truck manufacturers primarily in North America. Market cap at $549.91M, most recent closing price at $20.18. Levered free cash flow at $85.51M vs. enterprise value at $342.81M (implies a LFCF/EV ratio at 24.94%). Dividend yield at 3.17%, payout ratio at 25.46%.

9. Universal Corp. (UVV): Operates as a leaf tobacco merchant and processor worldwide. Market cap at $1.21B, most recent closing price at $51.73. Levered free cash flow at $233.25M vs. enterprise value at $1.81B (implies a LFCF/EV ratio at 12.89%). Dividend yield at 3.87%, payout ratio at 32.42%.

*LFCF/EV data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 9 High-Yield Stocks Undervalued By Levered Free Cash Flow