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Do you prefer stocks that pay dividends you can rely on? We ran a screen with this idea in mind.

We began by screening the S&P 500 for dividend stocks: those paying dividend yields above 2% and sustainable payout ratios below 50%.

Then we screened that universe for those that appear undervalued relative to the Graham Number. The Graham Number is a measure of maximum fair value created by the "godfather of value investing," Benjamin Graham.

It is based off of a stock's EPS and book value per share (BVPS).

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be undervalued.

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

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

1. AFLAC Inc. (NYSE:AFL): Provides supplemental health and life insurance. Market cap at $24.87B, most recent closing price at $53.03. Diluted TTM earnings per share at 6.07, and a MRQ book value per share value at 34.1, implies a Graham Number fair value = sqrt(22.5*6.07*34.1) = $68.24. Based on the stock's price at $52.93, this implies a potential upside of 28.93% from current levels. Dividend yield at 2.64%, payout ratio at 21.83%.

2. BB&T Corporation (NYSE:BBT): Operates as the financial holding company for Branch Banking and Trust Company that provides banking and trust services to small and mid-size businesses, public agencies, local governments, and individuals in the United States. Market cap at $21.21B, most recent closing price at $30.32. Diluted TTM earnings per share at 2.55, and a MRQ book value per share value at 26.88, implies a Graham Number fair value = sqrt(22.5*2.55*26.88) = $39.27. Based on the stock's price at $30.31, this implies a potential upside of 29.57% from current levels. Dividend yield at 2.64%, payout ratio at 29.76%.

3. The Chubb Corporation (NYSE:CB): Provides property and casualty insurance to businesses and individuals. Market cap at $20.47B, most recent closing price at $78.15. Diluted TTM earnings per share at 6.89, and a MRQ book value per share value at 60.98, implies a Graham Number fair value = sqrt(22.5*6.89*60.98) = $97.23. Based on the stock's price at $77.78, this implies a potential upside of 25.% from current levels. Dividend yield at 2.1%, payout ratio at 22.87%.

4. Chevron Corporation (NYSE:CVX): Engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. Market cap at $222.02B, most recent closing price at $113.44. Diluted TTM earnings per share at 12.19, and a MRQ book value per share value at 67.93, implies a Graham Number fair value = sqrt(22.5*12.19*67.93) = $136.50. Based on the stock's price at $111.73, this implies a potential upside of 22.17% from current levels. Dividend yield at 3.17%, payout ratio at 28%.

5. Dell Inc. (NASDAQ:DELL): Provides integrated technology solutions in the information technology ((NYSE:IT)) industry worldwide. Market cap at $22.88B, most recent closing price at $13.17. Diluted TTM earnings per share at 1.47, and a MRQ book value per share value at 5.86, implies a Graham Number fair value = sqrt(22.5*1.47*5.86) = $13.92. Based on the stock's price at $10.88, this implies a potential upside of 27.96% from current levels. Dividend yield at 2.43%, payout ratio at 5.33%.

6. Kohl's Corp. (NYSE:KSS): Operates department stores in the United States. Market cap at $9.83B, most recent closing price at $42.75. Diluted TTM earnings per share at 4.38, and a MRQ book value per share value at 26.43, implies a Graham Number fair value = sqrt(22.5*4.38*26.43) = $51.04. Based on the stock's price at $42.02, this implies a potential upside of 21.46% from current levels. Dividend yield at 3%, payout ratio at 27.54%.

7. Marathon Petroleum Corporation (NYSE:MPC): Engages in refining, transporting, and marketing petroleum products primarily in the United States and internationally. Market cap at $21.8B, most recent closing price at $64.26. Diluted TTM earnings per share at 7.36, and a MRQ book value per share value at 33.83, implies a Graham Number fair value = sqrt(22.5*7.36*33.83) = $74.85. Based on the stock's price at $61.99, this implies a potential upside of 20.74% from current levels. Dividend yield at 2.18%, payout ratio at 14.81%.

8. Marathon Oil Corporation (NYSE:MRO): Operates as an international energy company with operations in the United States, Canada, Africa, the Middle East and Europe. Market cap at $22.56B, most recent closing price at $31.93. Diluted TTM earnings per share at 2.55, and a MRQ book value per share value at 25.59, implies a Graham Number fair value = sqrt(22.5*2.55*25.59) = $38.32. Based on the stock's price at $32.15, this implies a potential upside of 19.18% from current levels. Dividend yield at 2.13%, payout ratio at 25.73%.

9. SLM Corporation (NASDAQ:SLM): Provides education finance in the United States. Market cap at $8.01B, most recent closing price at $17.33. Diluted TTM earnings per share at 2.19, and a MRQ book value per share value at 9.47, implies a Graham Number fair value = sqrt(22.5*2.19*9.47) = $21.60. Based on the stock's price at $17.37, this implies a potential upside of 24.36% from current levels. Dividend yield at 2.9%, payout ratio at 21.44%.

*BVPS and EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

Source: 9 S&P 500 Dividend Stocks Undervalued By The Graham Number