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By Matt Doiron

Price targets from sell-side analysts are far from perfect guides to upside opportunities, but they do provide a quantitative measurement of how much these analysts believe a stock is undervalued. We can also combine the spread between a stock's current price and its price target with other metrics (for example, a stock's dividend yield) in order to improve the process of identifying initial ideas. Investors can then research any companies which seem appealing. Here are five stocks with high daily dollar volumes which pay dividend yields of at least 4% going by current prices and recent dividend levels, and which are undervalued by at least 14% according to 1-year analyst price targets:

Vale (NYSE:VALE) leads our list, as its current stock price is $16.73, its 1-year consensus target is $23.03, and the dividend yield is close to 5%, according to current dividend policy. The $86 billion market cap company mines industrial metals in Brazil, and given its dependence on macro demand, it's unsurprising that the stock's beta is fairly high at 1.5. The stock trades at 18 times trailing earnings, but the Street is expecting the bottom line to improve considerably over the next couple of years. Renaissance Technologies, founded by billionaire Jim Simons, increased its holdings of Vale during Q4 to almost 4 million shares (see Renaissance's stock picks).

Another arguably undervalued high yield stock is BP (NYSE:BP), still working off poor sentiment from the Deepwater Horizon disaster. The target price is $51.25, while the stock is currently trading below $43. BP recently increased its quarterly dividend payment, pulling its yield over 5% by doing so; its forward earnings multiple of 8 is also attractive, though not uncommon for an oil major in the current environment. Hedge funds weren't as excited about BP in the fourth quarter of 2012 as in Q3, but it still made our list of the most popular energy stocks among hedge funds (find more energy stocks hedge funds loved).

Joining BP as a high-yield, high-potential-upside oil major is Total (NYSE:TOT). We get the price target as 18% above current levels, and the stock's dividend yield as over 5% and possibly closer to 6% (quarterly payments are not fixed, at least not in dollar terms). Total also stands out as a potential value play: its market cap of about $110 billion represents a valuation of 8 times its trailing earnings. International Value Advisors, which is managed by Charles de Vaulx, reported a position of 5.5 million shares at the end of December (check out more stocks International Value Advisors owned).

Windstream (NASDAQ:WIN)'s current price is about $8.50 per share, with Wall Street analysts expecting its price to rise almost to $10 within the year. Windstream is a telecommunications and cloud computing services company with a market capitalization of $5 billion. The company has made quarterly dividend payments of 25 cents per share for several years (making for an annual yield of over 10% at current prices), though we would be concerned that the pricing is a bit high as the trailing P/E is 30. Windstream's stock price has fallen 22% in the last year, leaving many buyers of the stock underwater even with the yield.

Rounding out our list of stocks is Linn Energy (NASDAQ:LINE), which currently trades at about $38.30, leaving it somewhat below the sell-side target of $43.75 in the next year. Linn develops oil and gas properties in the onshore United States, and has a good record of increasing its dividends over time (though the stock only became publicly traded in early 2006). At this point, the dividend yield comes out to over 7%, though as with Windstream, we do have some concerns related to fundamental value; specifically, even after an expected increase in earnings per share analyst consensus implies a forward P/E of 18.

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

Business relationship disclosure: This article is written by Insider Monkey's writer, Matt Doiron, and edited by Meena Krishnamsetty. They don't have any business relationships with any of the companies mentioned in this article and they didn't receive compensation (other than from Insider Monkey and Seeking Alpha) to write this article.

Source: The Top 5 Most 'Undervalued' High Dividend Stocks