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One way to search for potentially undervalued stocks is by comparing current price to analyst target prices.

Of course, analyst prices tend to be inflated most of the time, so we ran a screen that used the most pessimistic analyst target price as the benchmark for our analysis.

In addition, we only focused on companies that have more than 5 analyst target prices (to make sure we only focus on companies that have decent analyst coverage).

We screened stocks of the S&P 500 that pay dividend yields above 1% and sustainable payout ratios below 50% for those trading at significant discounts to even the most pessimistic analyst target prices, suggesting that these stocks may be undervalued.

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 should be trading higher? Use this list as a starting-off point for your own analysis.

List sorted by potential upside implied by target price.

1. Newell Rubbermaid Inc. (NYSE:NWL): Designs, manufactures, sources, packages, and distributes consumer and commercial products. Market cap of $3.64B. Dividend yield at 2.56%, payout ratio at 20.49%. Of the 12 analysts that have set a target price on the stock, the lowest price target stands at $16.00. This implies a current upside of 28.0% from current levels around $12.50. The stock has had a couple of great days, gaining 12.21% over the last week.

2. Devon Energy Corporation (NYSE:DVN):
Engages in the acquisition, exploration, development, and production of natural gas and oil in the United States and Canada. Market cap of $24.47B. Dividend yield at 1.16%, payout ratio at 18.91%. Of the 24 analysts that have set a target price on the stock, the lowest price target stands at $75.00. This implies a current upside of 27.64% from current levels around $58.76. The stock has had a couple of great days, gaining 10.16% over the last week.

3. SLM Corporation (NASDAQ:SLM):
Provides education finance in the United States. Market cap of $6.89B. Dividend yield at 2.99%, payout ratio at 42.26%. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $17.00. This implies a current upside of 26.87% from current levels around $13.40. The stock has had a couple of great days, gaining 18.06% over the last week.

4. Stanley Black & Decker, Inc. (NYSE:SWK):
Provides hand tools, mechanical access solutions, and electronic security solutions. Market cap of $9.43B. Dividend yield at 2.93%, payout ratio at 40.64%. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $71.00. This implies a current upside of 26.70% from current levels around $56.04. The stock has had a couple of great days, gaining 16.15% over the last week.

5. MetLife, Inc. (NYSE:MET):
Provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. Market cap of $32.15B. Dividend yield at 2.43%, payout ratio at 32.87%. Of the 17 analysts that have set a target price on the stock, the lowest price target stands at $38.00. This implies a current upside of 25.0% from current levels around $30.40. The stock has had a couple of great days, gaining 14.29% over the last week.

6. Covidien plc (NYSE:COV):
Develops, manufactures, and sells healthcare products for use in clinical and home settings in the United States and internationally. Market cap of $22.38B. Dividend yield at 1.98%, payout ratio at 21.92%. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $56.00. This implies a current upside of 23.46% from current levels around $45.36. The stock has had a couple of great days, gaining 6.86% over the last week.

7. Comcast Corporation (NASDAQ:CMCSA):
Provides entertainment, information, and communications products and services in the United States and internationally. Market cap of $63.37B. Dividend yield at 1.95%, payout ratio at 29.74%. Of the 23 analysts that have set a target price on the stock, the lowest price target stands at $28.00. This implies a current upside of 21.48% from current levels around $23.05. The stock has had a couple of great days, gaining 13.21% over the last week.

8. Xerox Corp. (NYSE:XRX):
Engages in the development, manufacture, marketing, service, and finance of document equipment, software, solutions, and services worldwide. Market cap of $10.50B. Dividend yield at 2.27%, payout ratio at 24.47%. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $9.00. This implies a current upside of 20.32% from current levels around $7.48. Might be undervalued at current levels, with a PEG ratio at 0.65, and P/FCF ratio at 9. The stock has had a couple of great days, gaining 11.31% over the last week.

9. PerkinElmer Inc. (NYSE:PKI):
Provides technology, services, and solutions to the diagnostics, research, environmental and safety, and industrial and laboratory services markets worldwide. Market cap of $2.08B. Dividend yield at 1.52%, payout ratio at 26.17%. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a current upside of 19.63% from current levels around $18.39. The stock has lost 20.08% over the last year.

10. Dun & Bradstreet Corp. (NYSE:DNB):
Provides commercial information and insight on businesses worldwide. Market cap of $3.10B. Dividend yield at 2.28%, payout ratio at 27.45%. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $75.00. This implies a current upside of 18.95% from current levels around $63.05. The stock has had a couple of great days, gaining 6.41% over the last week.

11. EI DuPont de Nemours & Co. (NYSE:DD):
Chemicals Industry. Market cap of $40.26B. Dividend yield at 3.80%, payout ratio at 44.94%. Of the 12 analysts that have set a target price on the stock, the lowest price target stands at $51.00. This implies a current upside of 18.14% from current levels around $43.17. The stock has had a couple of great days, gaining 12.16% over the last week.

12. CONSOL Energy Inc. (NYSE:CNX):
Engages in the production of multi-fuel energy and provision of energy services primarily to the electric power generation industry in the United States. Market cap of $8.66B. Dividend yield at 1.05%, payout ratio at 20.13%. Of the 22 analysts that have set a target price on the stock, the lowest price target stands at $45.00. This implies a current upside of 17.80% from current levels around $38.20. The stock has had a couple of great days, gaining 20.5% over the last week but has performed poorly over the last month, losing 11.41%.

13. Noble Corp. (NYSE:NE):
Operates as an offshore drilling contractor for the oil and gas industry worldwide. Market cap of $7.79B. Dividend yield at 1.89%, payout ratio at 49.71%. Of the 34 analysts that have set a target price on the stock, the lowest price target stands at $36.00. This implies a current upside of 16.66% from current levels around $30.86. The stock has had a couple of great days, gaining 7.98% over the last week.

14. Caterpillar Inc. (NYSE:CAT):
Manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. Market cap of $51.12B. Dividend yield at 2.33%, payout ratio at 27.95%. Of the 17 analysts that have set a target price on the stock, the lowest price target stands at $92.00. This implies a current upside of 16.26% from current levels around $79.13. The stock has had a couple of great days, gaining 12.16% over the last week.

*Target price data sourced from Thomson/First Call (via Yahoo! Finance), price data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 14 S&P 500 Dividend Stocks Undervalued by Target Price