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In the search for potentially undervalued stocks, we ran a screen based on the theoretical assumption that if P/E is equal to a constant K, growth in EPS estimates should be matched by proportionate growth in price. When they don’t match up, a mispricing may have occurred.

We ran a screen on dividend stocks paying dividend yields above 4% and sustainable payout ratios below 50% for those exhibiting this mismatch between changes in EPS estimate and price.

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.)



Do you think these stocks are undervalued? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. Sun Life Financial Inc. (NYSE:SLF): Provides various life and health insurance, savings, investment management, retirement, and pension products and services to individuals and corporate customers. Market cap of $13.22B. Dividend yield at 6.42%, payout ratio at 45.49%. Over the last 30 days, analyst projected EPS has increased 2.72% (from $2.94 to $3.02), while the price has decreased 7.68% (from $25.77 to $23.79). Might be undervalued at current levels, with a PEG ratio at 0.78, and P/FCF ratio at 2.97. The stock is currently stuck in a downtrend, trading 8.46% below its SMA20, 11.73% below its SMA50, and 21.79% below its SMA200. The stock has performed poorly over the last month, losing 15.54%.

2. AstraZeneca PLC (NYSE:AZN):
Develops, and commercializes prescription medicines for cardiovascular, gastrointestinal, infection, neuroscience, oncology, and respiratory and inflammation diseases worldwide. Market cap of $58.39B. Dividend yield at 6.16%, payout ratio at 44.20%. Over the last 30 days, analyst projected EPS has increased 2.83% (from $7.06 to $7.26), while the price has decreased 0.63% (from $44.64 to $44.36). The stock has lost 8.83% over the last year.

3. SK Telecom Co. Ltd. (NYSE:SKM):
Provides wireless telecommunications services using code division multiple access and wide-band CDMA technologies. Market cap of $8.89B. Dividend yield at 5.72%, payout ratio at 48.82%. Over the last 30 days, analyst projected EPS has increased 2.87% (from $2.09 to $2.15), while the price has decreased 9.28% (from $15.51 to $14.07). The stock is currently stuck in a downtrend, trading 7.45% below its SMA20, 9.91% below its SMA50, and 21.3% below its SMA200. The stock has performed poorly over the last month, losing 14.69%.

4. IDT Corporation (NYSE:IDT):
Operates as a telecommunications and energy company. Market cap of $433.82M. Dividend yield at 4.88%, payout ratio at 29.37%. Over the last 30 days, analyst projected EPS has increased 7.69% (from $1.30 to $1.40), while the price has decreased 2.02% (from $20.82 to $20.40). The stock is currently stuck in a downtrend, trading 7.66% below its SMA20, 10.55% below its SMA50, and 23.78% below its SMA200. The stock has gained 14.43% over the last year.

5. Etablissements Delhaize Freres et Cie Le Lion S.A. (NYSE:DEG):
Operates food supermarkets in North America, Europe, and southeast Asia. Market cap of $5.77B. Dividend yield at 4.42%, payout ratio at 28.20%. Over the last 30 days, analyst projected EPS has increased 0.67% (from $7.45 to $7.50), while the price has decreased 8.11% (from $63.60 to $58.44). The stock is currently stuck in a downtrend, trading 5.94% below its SMA20, 12.38% below its SMA50, and 23.24% below its SMA200. The stock has performed poorly over the last month, losing 14.7%.

6. Superior Industries International, Inc. (NYSE:SUP):
Designs, develops, manufactures, sells, and supplies cast aluminum road wheels to automobile and light truck manufacturers primarily in North America. Market cap of $400.61M. Dividend yield at 4.34%, payout ratio at 31.11%. Over the last 30 days, analyst projected EPS has increased 0.66% (from $1.52 to $1.53), while the price has decreased 2.40% (from $15.83 to $15.45). The stock is currently stuck in a downtrend, trading 6.42% below its SMA20, 11.75% below its SMA50, and 27.17% below its SMA200. The stock has performed poorly over the last month, losing 10.98%.

7. The Bank Of Nova Scotia (NYSE:BNS):
Offers various personal, commercial, corporate, and investment banking services in Canada and internationally. Market cap of $52.61B. Dividend yield at 4.16%, payout ratio at 44.40%. Over the last 30 days, analyst projected EPS has increased 3.91% (from $4.60 to $4.78), while the price has decreased 4.98% (from $52.78 to $50.15). The stock is currently stuck in a downtrend, trading 5.52% below its SMA20, 8.47% below its SMA50, and 14.47% below its SMA200. The stock has performed poorly over the last month, losing 11.88%.

8. Comtech Telecommunications Corp. (NASDAQ:CMTL):
Designs and produces a wide range of telecom systems and services. Market cap of $747.73M. Dividend yield at 4.04%, payout ratio at 38.64%. Over the last 30 days, analyst projected EPS has increased 9.26% (from $1.08 to $1.18), while the price has increased 2.52% (from $27.40 to $28.09). The stock is a short squeeze candidate, with a short float at 8.82% (equivalent to 5.64 days of average volume). The stock has gained 3.3% over the last year.

EPS and price data sourced from Yahoo! Finance; all other data sourced from Finviz.

Source: 8 High-Yield Stocks Undervalued By EPS Trends