If you like to invest in dividend-paying stocks and you also believe in Benjamin Graham’s investment philosophy, then this may be an interesting starting point for your own analysis.

To compile this list we looked for companies with the following characteristics:

- Expected dividend per share greater than previous fiscal year dividend per share

- Trailing twelve month (TTM) profit margin greater than previous TTM profit margin

- Significantly undervalued by the Graham Number

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

The Graham Number was considered to be the maximum price an investor should pay for a stock, according to the formula developed by Benjamin Graham.

It is calculated as follows:

Graham Number = Square Root of (22.5) x (Earnings per Share) x (Book Value per Share)

This equation is predicated on Graham’s belief that the price-to-earnings (P/EPS) ratio should be no more than 15, and the price-to-book value (P/BVPS) ratio should be no more than 1.5.

Therefore we only included companies that meet both of these criteria. As a result, the product of the two should not be more than 22.5. In other words, (P/EPS of 15) x (P/BVPS of 1.5) = 22.5.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Considering this data, which of these stocks do you find to be most attractive?

*Diversified Electronics Industry. Market cap of $2.55B. Dividend yield at 1.47%. Current year dividend per share estimate at $0.21 vs. last year's dividend per share at $0.19 (10.53% change). Trailing twelve month net profit margin at 14.76% vs. 10.95% in the previous twelve month period. Payout ratio at 13.24%. The company's current ratio stands at 6.8. BVPS at 11.99, diluted EPS at 1.43.*

**1. AVX Corp. (NYSE:AVX):**AVX Graham number = sqrt(22.5 x 11.99 x 1.43) = $19.64. Given the current price at $14.98, this implies an upside of 31.12%. The stock has gained 13.3% over the last year.

*Investment Brokerage Industry. Market cap of $18.25B. Dividend yield at 2.06%. Current year dividend per share estimate at $5.59 vs. last year's dividend per share at $4.6 (21.52% change). Trailing twelve month net profit margin at 37.2% vs. 32.6% in the previous twelve month period. Payout ratio at 27.63%. The company's current ratio stands at 1.23. BVPS at 310.89, diluted EPS at 17.52.*

**2. CME Group Inc. (NASDAQ:CME):**CME Graham number = sqrt(22.5 x 310.89 x 17.52) = $350.08. Given the current price at $269.75, this implies an upside of 29.78%. The stock has lost 10.95% over the last year.

*: Asset Management Industry. Market cap of $1.77B. Dividend yield at 2.1%. Current year dividend per share estimate at $0.15 vs. last year's dividend per share at $0.04 (275.0% change). Trailing twelve month net profit margin at 17.03% vs. 11.34% in the previous twelve month period. Payout ratio at 4.44%. The company's current ratio stands at 3.66. BVPS at 6.48, diluted EPS at 0.92.*

**3. Janus Capital Group, Inc. (NYSE:JNS)**JNS Graham number = sqrt(22.5 x 6.48 x 0.92) = $11.58. Given the current price at $9.43, this implies an upside of 22.82%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.67).

*Shipping Industry. Market cap of $494.71M. Dividend yield at 9.88%. Current year dividend per share estimate at $1.95 vs. last year's dividend per share at $1.7 (14.71% change). Trailing twelve month net profit margin at 39.22% vs. 33.55% in the previous twelve month period. Payout ratio at 116.91%. The company's current ratio stands at 6.79. BVPS at 15.24, diluted EPS at 1.76.*

4. Knightsbridge Tankers Limited (VLCCF):4. Knightsbridge Tankers Limited (VLCCF):

VLCCF Graham number = sqrt(22.5 x 15.24 x 1.76) = $24.57. Given the current price at $20.34, this implies an upside of 20.78%. The stock is a short squeeze candidate, with a short float at 12.22% (equivalent to 13.74 days of average volume).

*Data sourced from Screener.co, Yahoo! Finance and Finviz.

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