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If you're looking for steady dividend paying stocks with a long history of paying dividends, the S&P Dividend Aristocrats is a good place to start your research. These stocks have all increased their dividends each year for the past 25 years. This week we screened the S&P Dividend Aristocrats for dividend paying stocks with low next-year PEG ratios, strong next year EPS estimates, low debt loads, attractive financial & management metrics, and low to moderate price gains over the past year.

We came up with 3 prospects: Aflac (NYSE:AFL), Leggett & Platt (NYSE:LEG), and Lowe's (NYSE:LOW). Lowe's and Leggett & Platt are plays on the consumer, via the home improvement and home furnishing categories, while Aflac sells supplemental accidental and health insurance, mainly through employers. With a 5%-plus dividend yield, LEG is listed in the Consumer Discretionary sector of our High Dividend Stocks by Sector Tables.

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Financial/Mgt. Metrics:

As you can see, all three firms have a relatively low debt load, but AFL has the best ROE and profitability numbers. However, LEG wins in the dividend yield category:

Share Performance:

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Although AFL's 1-year and YTD share price performance is much higher than LEG and LOW, AFL still looks undervalued, on a PEG basis:

Valuation:

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Although AFL's next-year EPS growth estimates are the lowest of the group, its much lower P/E translates into a lower Next Year PEG of .76. AFL also has the lowest 5-year PEG of the group, with .97.

There are Covered Calls and Cash Secured Puts available on all 3 of these dividend stocks. In fact, AFL and LEG both have high options yields, ranging up to the 20%-plus range, for these Covered Call options:

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AFL-CALL-2010-11-16

The Cash Secured Put options have a broader range, and also offer double-digit annualized yields:

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Disclosure: No positions

Source: 3 Undervalued Dividend Aristocrats With High Options Yields