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If you’re interested in high yield income stocks that may be currently undervalued, this list may be a place to start your search.

All of the stocks listed below meet the following criteria:

  • Market cap above $300M
  • Dividends between 4-7%
  • Rallying above their 20-day, 50-day and 200-day moving averages
  • Undervalued by the Levered Free Cash Flow / Enterprise Value ratio (LFCF/EV)

LFCF/EV provides a metric considered to be more accurate than market capitalization to determine a company's value. It works by comparing a company’s estimated takeover cost after cash and expenses are deducted (EV) with its levered free cash flow (FLCF), or the amount of cash available to stockholders after interest payments on debt are made.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

With this in mind, do you feel these companies are truly undervalued? Do they have the potential for more upward momentum? Use the data below to draw your own conclusions.

List sorted by LFCF/EV ratio.

1. Icahn Enterprises, L.P. (NASDAQ:IEP): Property Management Industry. Market cap of $3.89B. Dividend Yield of 4.35%. Levered free cash flow at $2.26B vs. enterprise value at $8.39B (implies a LFCF/EV ratio of 26.94%). Exhibiting strong upside momentum--currently trading 11.01% above its SMA20, 13.73% above its SMA50, and 23.1% above its SMA200. The stock has had a couple of great days, gaining 13.74% over the last week.

2. Vivo Participacoes S.A. (NYSE:VIV): Wireless Communications Industry. Market cap of $18.53B. Dividend Yield of 6.86%. Levered free cash flow at $3.24B vs. enterprise value at $19.49B (implies a LFCF/EV ratio of 16.62%). Exhibiting strong upside momentum--currently trading 10.54% above its SMA20, 14.4% above its SMA50, and 46.96% above its SMA200. The stock has had a couple of great days, gaining 6.01% over the last week.

3. Baldwin & Lyons Inc. (NASDAQ:BWINB): Property & Casualty Insurance Industry. Market cap of $323.74M. Dividend Yield of 4.58%. Levered free cash flow at $35.20M vs. enterprise value at $297.45M (implies a LFCF/EV ratio of 11.83%). The stock has gained 1.16% over the last year.

4. Alto Palermo S.A. (NASDAQ:APSA): Property Management Industry. Market cap of $410.55M. Dividend Yield of 4.88%. Levered free cash flow at $81.77M vs. enterprise value at $866.38M (implies a LFCF/EV ratio of 9.44%). Exhibiting strong upside momentum--currently trading 9.37% above its SMA20, 27.03% above its SMA50, and 51.29% above its SMA200. The stock has had a couple of great days, gaining 11.41% over the last week.

5. Telecom Corp. of New Zealand Ltd. (NZT): Telecom Services Industry. Market cap of $3.74B. Dividend Yield of 6.64%. Levered free cash flow at $415.55M vs. enterprise value at $5.34B (implies a LFCF/EV ratio of 7.78%). The stock has had a good month, gaining 15.68%.

6. EV Energy Partners LP (NASDAQ:EVEP): Oil & Gas Drilling & Exploration Industry. Market cap of $1.88B. Dividend Yield of 5.53%. Levered free cash flow at $167.88M vs. enterprise value at $2.33B (implies a LFCF/EV ratio of 7.21%). The stock has gained 93.18% over the last year.

**Dividend growth rates sourced from Reuters, levered free cashflow data sourced from Yahoo Finance, rest of data sourced from Finviz.


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

Source: Rallying High Yield Stocks Still Undervalued by Enterprise Value