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Today, many investors are looking for strong dividends to improve their portfolio's performance and generate some much needed income.

We've searched through over 5,500 stocks using our proprietary tool to find undervalued stocks that have a history of consistently paying dividends (for at least 10 years).

Each of these stocks are undervalued according to a future free cash flow version of discounted cash flow, using a 15% discount rate.

We've listed stocks in order of their Vuru Grade. The Vuru Grade is our point system for stocks. It scores stocks out of a possible 100 points based on a variety of factors including Valuation, Pricing Power, Cash Return on Invested Capital, the company's Balance Sheet and more. It has been fine-tuned to deliver strong results and provide accurate assessments of the quality of stocks.

We hope you'll use this list as a starting point for your analysis:

1. Novartis Ag (NYSE:NVS)

From Reuters Finance:

Novartis provides healthcare solutions. The Company’s portfolio includes medicines, preventive vaccines and diagnostic tools, generic pharmaceuticals and consumer health products. The Company operates in four divisions: pharmaceuticals, vaccines and diagnostics, sandoz, and consumer health.

  • Sector: Healthcare
  • Industry: Drug Manufacturers - Major
  • Mkt Cap: $145.39B
  • Dividend Yield: 4.29%
  • Vuru Grade: 90.92/100
  • Growth Price: $85.49
  • Current Price: $55.12
  • Margin of Safety: 55.10%

2. Telephone Corporation of New Zealand Limited (NZT)

From Yahoo Finance:

Telecom Corporation of New Zealand Limited, together with its subsidiaries, provides telecommunications services, as well as information, communication, and technology services in New Zealand and Australia. Its products and services include local, national, international, and value-added telephone services; mobile services; data, broadband, and Internet services; IT consulting, implementation, and procurement services; and equipment sales and installation services.

  • Sector: Technology
  • Industry: Telecom Services - Foreign
  • Mkt Cap: $3.01B
  • Dividend Yield: 9.38%
  • Vuru Grade: 86.15/100
  • Growth Price: $12.28
  • Current Price: $7.83
  • Margin of Safety: 56.84%

3. Sanofi-Aventis SA (NYSE:SNY)

From Yahoo Finance:

Sanofi-Aventis, a healthcare company, engages in the discovery, development, and distribution of therapeutic solutions to improve the lives of everyone. It offers a range of healthcare assets, including a broad-based product portfolio in prescription drugs, OTC/OTX, generics, vaccines, and animal health. The company also has exclusive worldwide license to develop, manufacture, and commercialize antibody drug conjugate (NYSE:ADC) products for the treatment of cancer.

  • Sector: Healthcare
  • Industry: Drugs Manufacturers - Major
  • Mkt Cap: $95.29B
  • Dividend Yield: 4.03%
  • Vuru Grade: 86.07/100
  • Growth Price: $67.99
  • Current Price: $36.34
  • Margin of Safety: 87.08%

4. NTT DoCoMo, Inc. (NYSE:DCM)

From Reuters Finance:

NTT DoCoMo, Inc. is a mobile telecommunication services provider belonging to NTT group whose parent company is Nippon Telegraph and Telephone Corporation (NYSE:NTT). The total number of subscriptions to its cellular services freedom of mobile multimedia access (FOMA) and mova was approximately 56.08 million and its domestic market share was 50% as of March 31, 2010.

  • Sector: Technology
  • Industry: Wireless Communications
  • Mkt Cap: $75.34B
  • Dividend Yield: 3.44%
  • Vuru Grade: 85.77/100
  • Growth Price: $26.96
  • Current Price. $17.26
  • Margin of Safety: 56.21%

5. Eni S.p.A. (NYSE:E)

From Yahoo Finance:

Eni SpA, an integrated energy company, engages in the exploration, production, transportation, transformation, and marketing of oil and natural gas. The company involves in the production and sale of electricity; refining and marketing of petroleum products; and production and sale of petrochemical products and hydrocarbons. In addition, it involves in offshore and onshore hydrocarbon fields construction.,

  • Sector: Basic Materials
  • Industry: Major Integrated Oil & Gas
  • Mkt Cap: $100.96B
  • Dividend Yield: 5.39%
  • Vuru Grade: 84.58/100
  • Growth Price: $119.58
  • Current Price: $50.41
  • Margin of Safety: 137.21%


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

Source: 5 Undervalued Stocks With a 10+ Year History of Paying Dividends