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If you feel better knowing that a dividend stock has consistently raised its dividend over the past 10 years, you may be interested in this list.

We ran a screen on dividend stocks that have 10-year historical dividend growth rates over 10%. We then screened these stocks for those that appear undervalued to the Graham number.

Benjamin Graham, also known as the “godfather of value investing,” created an equation that calculates the fair value of stocks based on two fundamental data points: Current earnings per share and current book value per share. 
The Graham Number = Square Root of (22.5) x (TTM Earnings per Share) x (MRQ Book Value per Share). 

This equation assumes that a stock is overvalued if P/E is over 15 or P/BV is over 1.5.

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.

Stocks trading at a significant discount to their Graham number appear undervalued.

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by Graham number.

1. M&T Bank Corp. (NYSE:MTB): Operates as the holding company for M&T Bank and M&T Bank, National Association that provide commercial and retail banking services to individuals, corporations and other businesses and institutions. Market cap of $9.41B. Dividend yield at 3.67%, payout ratio at 40.85%. 10-year dividend growth rate at 16.18%. TTM Diluted EPS at $6.91, MRQ Book Value Per Share at $67.73, Graham number at $102.62 (vs. current price at $74.94, implies a potential upside of 36.93%). The stock has had a good month, gaining 10.37%.

2. Meredith Corp. (NYSE:MDP): Engages in magazine publishing and related brand licensing, television broadcasting, integrated marketing, interactive media and video production businesses in the United States. Market cap of $1.10B. Dividend yield at 4.02%, payout ratio at 33.61%. 10-year dividend growth rate at 11.38%. TTM Diluted EPS at $2.78, MRQ Book Value Per Share at $17.20, Graham number at $32.80 (vs. current price at $24.15, implies a potential upside of 35.82%). The stock is a short squeeze candidate, with a short float at 22.4% (equivalent to 11.05 days of average volume). The stock has had a good month, gaining 10.73%.

3. Southside Bancshares Inc. (NASDAQ:SBSI): Operates as the holding company for Southside Bank that provides financial products and services to individuals, businesses, municipal entities and non-profit organizations. Market cap of $336.73M. Dividend yield at 3.52%, payout ratio at 36.36%. 10-year dividend growth rate at 19.93%. TTM Diluted EPS at $2.25, MRQ Book Value Per Share at $14.74, Graham number at $27.32 (vs. current price at $20.47, implies a potential upside of 33.45%). The stock is a short squeeze candidate, with a short float at 6.44% (equivalent to 17.23 days of average volume). The stock has had a good month, gaining 12.41%.

4. ConocoPhillips (NYSE:COP): Operates as an integrated energy company worldwide. Market cap of $98.62B. Dividend yield at 3.68%, payout ratio at 30.57%. 10-year dividend growth rate at 12.20%. TTM Diluted EPS at $7.93, MRQ Book Value Per Share at $51.03, Graham number at $95.42 (vs. current price at $71.83, implies a potential upside of 32.84%). The stock has had a good month, gaining 15.37%.

5. Entergy Corporation (NYSE:ETR): Operates as an integrated energy company in the United States. Market cap of $12.19B. Dividend yield at 4.85%, payout ratio at 46.76%. 10-year dividend growth rate at 10.26%. TTM Diluted EPS at $7.06, MRQ Book Value Per Share at $48.62, Graham number at $87.88 (vs. current price at $68.48, implies a potential upside of 28.33%). The stock has lost 3.63% over the last year.

6. Harris Corp. (NYSE:HRS): Operates as a communications and information technology company that serves government and commercial markets worldwide. Market cap of $4.36B. Dividend yield at 3.04%, payout ratio at 21.54%. 10-year dividend growth rate at 25.89%. TTM Diluted EPS at $4.60, MRQ Book Value Per Share at $20.32, Graham number at $45.86 (vs. current price at $36.79, implies a potential upside of 24.65%). Might be undervalued at current levels, with a PEG ratio at 0.83, and P/FCF ratio at 11.45. The stock is a short squeeze candidate, with a short float at 12.74% (equivalent to 9.37 days of average volume). The stock has lost 14.02% over the last year.

7. Harte-Hanks Inc. (NYSE:HHS): Operates as a direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to local, regional, national and international customer and business-to-business marketers. Market cap of $546.90M. Dividend yield at 3.56%, payout ratio at 42.39%. 10-year dividend growth rate at 16.23%. TTM Diluted EPS at $0.73, MRQ Book Value Per Share at $7.04, Graham number at $10.75 (vs. current price at $8.71, implies a potential upside of 23.46%). The stock is a short squeeze candidate, with a short float at 5.71% (equivalent to 8.11 days of average volume). The stock has had a good month, gaining 11.24%.

8. Greif, Inc. (NYSE:GEF): Engages in the manufacture and sale of industrial packaging products and containerboard and corrugated products worldwide. Market cap of $2.18B. Dividend yield at 3.65%, payout ratio at 42.24%. 10-year dividend growth rate at 19.93%. TTM Diluted EPS at $4.89, MRQ Book Value Per Share at $28.82, Graham number at $56.31 (vs. current price at $46.00, implies a potential upside of 22.42%). The stock has lost 19.41% over the last year.

9. General Dynamics Corp. (NYSE:GD): Provides business aviation, combat vehicles, weapons systems and munitions, military and commercial shipbuilding, and communications and information technology products and services worldwide. Market cap of $23.63B. Dividend yield at 2.88%, payout ratio at 24.79%. 10-year dividend growth rate at 12.44%. TTM Diluted EPS at $7.01, MRQ Book Value Per Share at $38.49, Graham number at $77.92 (vs. current price at $65.32, implies a potential upside of 19.28%). The stock has had a couple of great days, gaining 5.29% over the last week.

10. BancFirst Corporation (NASDAQ:BANF): Operates as the holding company for BancFirst that provides commercial banking services to retail customers and small to medium-sized businesses in the non-metropolitan trade centers of Oklahoma and the metropolitan markets of Oklahoma City, Tulsa, Lawton, Muskogee, Norman, and Shawnee. Market cap of $566.77M. Dividend yield at 2.88%, payout ratio at 35.38%. 10-year dividend growth rate at 11.27%. TTM Diluted EPS at $2.83, MRQ Book Value Per Share at $30.80, Graham number at $44.29 (vs. current price at $37.46, implies a potential upside of 18.22%). The stock is a short squeeze candidate, with a short float at 7.01% (equivalent to 19.1 days of average volume). The stock has had a good month, gaining 23.14%.

*BVPS and EPS data sourced from Yahoo! Finance, dividend growth rates sourced from Screener.co, all other data sourced from Finviz.

Source: 10 Stocks With 10 Years Of Strong Dividend Growth Undervalued By Graham