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By Matt Doiron

Even as the S&P 500 has been up in the last three months, many stocks have seen returns in the negative double digits. In some cases, the fall in the stock price has resulted in a company which pays a dividend seeing its annual yield increase to a level where it may now be of more interest to income investors. Of course, one reason why a dividend stock may be down is because markets believe the company may be forced to cut its dividend soon. Using data from Fidelity, here are five stocks with market capitalizations of at least $2 billion which are down at least 10% in the last three months and currently pay dividend yields of 4% or more:

Down over 30% in the last 3 months is Potash Corp. of Saskatchewan (NYSE:POT), after a competitor of the $26 billion market cap fertilizer company announced plans to increase its production volumes which could start a price war in the industry. Shortly before this announcement Potash Corp. had increased its quarterly dividend to 35 cents per share, which equates to a 4.8% yield at current prices with less than a 40% payout ratio. Of course, business will be negatively impacted by lower prices, but income investors may want to take a look anyway.

We track quarterly 13F filings from hundreds of hedge funds. We've found in our research that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year (learn more about our small cap strategy), and our own portfolio based on this strategy returned 33 percentage points more than the index over the last 11 months. Our database of hedge fund holdings also comes in handy when tracking individual stocks; we can see, for example, that billionaire Richard Chilton's Chilton Investment Company owned 1.1 million shares of Potash Corp. as of the end of March (see Chilton's stock picks).

Transocean (NYSE:RIG), the contract offshore driller, popped earlier this year after billionaire activist Carl Icahn took a position in the company (find Icahn's favorite stocks) and management increased the dividend in response. The annual yield now stands at 4.6% after a correction in the stock price over the past few months. Wall Street analysts- generally bullish on offshore drilling- are optimistic about future earnings, and so Transocean trades at only 8 times forward earnings estimates and at a five-year PEG ratio well below 1. The stock does tend to fluctuate with the overall market, with a beta of 2.0.

Canadian telecommunications company BCE (NYSE:BCE) also satisfies our criteria, as the stock is down 14% in the last three months bringing the dividend yield up to 5.6% (though investors should check to see how their income from foreign dividends would be taxed when comparing that yield to alternatives). As a telecom BCE is also a fairly defensive stock, with a beta of 0.4. Its financials have been stable, according to recent reports, though analysts expect a small decrease in earnings per share next year bringing the forward P/E up to 13.

Exelon (NYSE:EXC), a $26 billion market cap electricity and natural gas utility, is another potential pick for income or defensive investors with a beta of 0.4 and with the stock's decline over the last few months resulting in a 4% yield at current prices, even after the company recently cut its quarterly dividend to 31 cents per share. It too is valued at 13 times forward earnings estimates, as adjusted earnings per share are expected to decline to $2.45 this year and then to $2.28 in 2014. Therefore, it might not be as safe a pick as the P/E and the beta statistic would indicate.

Another utility which has been hit hard in recent months is American Electric Power (NYSE:AEP), down 10% from its levels three months ago. American Electric Power recently increased its quarterly payments to 49 cents per share as well, and so the dividend yield is now 4.2%. While profits have been down slightly recently, the sell-side expects the company to recover and as a result the forward P/E is 14. If earnings are in fact constant from that point forward, then with American Electric Power being a low beta stock as well it could be of interest.

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.