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Value investors often look for companies that are trading below their liquidation value, i.e. a company's price to book value per share below one. If you believe in this philosophy and you are also looking to boost your portfolio’s dividend income, this article could be an interesting starting point. o

To construct this list we looked for stocks with dividend yields greater than 2% and with these characteristics:

  • Trading below book value, i.e. price to book value per share below 1
  • Trading above its 20, 50, and 200-day moving averages (i.e. in a rally mode)
  • 5yr dividend growth rate better than the industry average

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.




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.



Given this information, which of stocks would you rate as the best value + income play?

1. State Auto Financial Corp. (STFC): Property & Casualty Insurance Industry. Market cap of $656.23M. Dividend yield at 3.68%. P/B at 0.76. This stock is 1.97% above its 20-day MA, 0.71% above its 50-day MA, and 2.65% above its 200-day MA. 5-year dividend growth rate at 17.32% vs. industry average at 16.0%. The stock has lost 2.33% over the last year.

2. Fidelity National Financial, Inc. (FNF): Surety & Title Insurance Industry. Market cap of $3.40B. Dividend yield at 3.15%. P/B at 0.99. This stock is 0.94% above its 20-day MA, 1.92% above its 50-day MA, and 9.87% above its 200-day MA. 5-year dividend growth rate at 22.51% vs. industry average at 16.0%. The stock is a short squeeze candidate, with a short float at 5.11% (equivalent to 7.24 days of average volume). The stock has gained 17.13% over the last year.

3. Nippon Telegraph & Telephone Corp. (NTT):
Telecom Services Industry. Market cap of $67.88B. Dividend yield at 2.64%. P/B at 0.62. This stock is 0.64% above its 20-day MA, 1.96% above its 50-day MA, and 3.02% above its 200-day MA. 5-year dividend growth rate at 14.87% vs. industry average at 11.92%. The stock has gained 16.28% over the last year.

4. Alterra Capital Holdings Limited (ALTE):
Property & Casualty Insurance Industry. Market cap of $2.32B. Dividend yield at 2.19%. P/B at 0.85. This stock is 0.32% above its 20-day MA, 0.97% above its 50-day MA, and 5.39% above its 200-day MA. 5-year dividend growth rate at 20.64% vs. industry average at 16.0%. The stock has gained 14.35% over the last year.

*Data sourced from Reuters and Finviz.

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

Source: 4 Undervalued Stocks on a Rally With Great Dividend Growth