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When it comes to value investing one of the first things investors always look at or ask about is the stock's current P/E valuation.

This makes sense, right?

It does but in today's world I correlate this with investor laziness.

Why?

That's how the majority of value investors start their initial due diligence because it's one of the most well-known valuation metrics but there's a problem with that.

What's the problem?

In an upward trending market when you're doing the exact same thing as everyone else, in my opinion, this makes it a lot more difficult to attain alpha returns. In that it's harder to identify great opportunities before the rest of the market does when you're doing the exact same thing as everyone else.

So what should you do instead?

Simple, try to uncover profitable stocks that still have room to go higher in less conventional ways.

How can we do that quickly though you wonder?

One way to do that is by first screening for dividend stocks with a low-to-fair P/S valuation.

For whatever reason this price-multiple valuation, in my view, never became quite as "popular" as the P/E or Forward P/E price-multiple valuation.

What does the P/S valuation tell us?

In a nutshell it tells investors how much the market values every dollar of sales.

A quick rule of thumb for the P/S valuation is that if it's above 3 then the stock is overvalued.

Does the P/S ratio have any shortcomings?

Like almost any valuation metric this is some limitation and the issue is that it doesn't tell investors how well the company translates its sales into profits. Still this shortcoming can be quickly remedied.

You can remedy this shortcoming by screening for dividend stocks with a low P/S valuation that also operates with strong net margins.

This lets you quickly identify which dividend stocks may not only have undervalued sales numbers but who are also generating strong profits from these top line numbers.

Remember, when a company grows its earnings over time, in this case due to strong net margins, its stock price should move higher as well.

Today I identified 4 interesting dividend stock picks worth reviewing for 2014 by screening in this less than conventional manner. I did this by screening for dividend stocks that have a P/S ratio (X<2), strong profitability (Net Margins>10%), and who don't have readily apparent liquidity issues (Current Ratio>1).

In my opinion, when it comes to value investing sometimes the easiest way to achieve alpha returns comes down to working smarter by simply taking a less-than-conventional approach.

1. Schweitzer-Mauduit International Inc. (SWM)

Schweitzer-Mauduit International Inc. manufactures and sells paper and reconstituted tobacco products to the tobacco industry; and specialized paper products for use in various applications. At this time Schweitzer-Mauduit International Inc. trades with a market cap. of $1.43B and trades with a P/S valuation of 1.86.

Currently, Schweitzer-Mauduit International Inc. offers a dividend yield of 3.12% and has Current Ratio of 3.70. In addition, Schweitzer-Mauduit International Inc. operates with a Net Margin of 17.10%.

Analyst Note:

At this time there are no analyst updates for Schweitzer-Mauduit International Inc. according to Finviz.com.

2. Empire District Electric Co. (EDE)

Empire District Electric Co. engages in the generation, purchase, transmission, distribution, and sale of electricity in the US. At this time Empire District Electric Co. trades with a market cap. of $1.04B and trades with a P/S valuation of 1.75.

Currently, Empire District Electric Co. offers a dividend yield of 4.27% and has Current Ratio of 1.70. In addition, Empire District Electric Co. operates with a Net Margin of 10.7%.

Analyst Note:

At this time there are no analyst updates for Empire District Electric Co. according to Finviz.com.

3. Rentech Nitrogen Partners, LP (RNF)

Rentech Nitrogen Partners, LP engages in the manufacture and sale of nitrogen fertilizer products for use in the United States. At this time Rentech Nitrogen Partners, LP trades with a market cap. of $693.84M and trades with a P/S valuation of 1.99.

Currently, Rentech Nitrogen Partners, LP offers a dividend yield of 6.05% and has Current Ratio of 1.90. In addition, Rentech Nitrogen Partners, LP operates with a Net Margin of 15.20%.

Analyst Note:

At this time there are no analyst updates for Rentech Nitrogen Partners, LP according to Finviz.com.

4. Strayer Education Inc. (STRA)

Strayer Education Inc. provides post-secondary education services for working adults. At this time Strayer Education Inc. trades with a market cap. of $495.76M and trades with a P/S valuation of .95.

Currently, Strayer Education Inc. offers a dividend yield of 8.48% and has Current Ratio of 2.80. In addition, Strayer Education Inc. operates with a Net Margin of 10%.

Analyst Note:

At this time there are no analyst updates for Strayer Education Inc. according to Finviz.com.

I hope this dividend stock list helps as investors do their own independent due diligence on dividend stocks to potentially buy in 2014.

Source: 4 Dividend Stocks With Strong Net Profit Margins To Push Them Toward Higher Ground

Additional disclosure: This is not to be construed as direct or indirect investment advice. Investors should always do their own independent due diligence before making any investment decisions.