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Market stability looks about as predictable as flipping a coin at this moment even with recent relief from Europe. Still, despite the odds we think there is plenty of opportunity on both the valuation and momentum front. Could investors have the best of both worlds you ask? In our opinion, while there is no guarantee of this we think there are definitely some companies with this potential because of their cheap valuations and moves to higher ground despite a weak market stomach.

The Price/Book Value Ratio is a great price-multiple valuation metric to find companies that may be potentially undervalued or overvalued. If a company has a Price/Book Value Ratio of less than 1 it is stated to be “trading below “break up” value. A lower P/BV Ratio can indicate a potentially mispriced company or indicate that something is fundamentally wrong with it.

Price/Book Value Ratio=Market Stock Price/Book Value Per Share

We ran a screen for dividend stocks trading at low price-multiple valuations (P/BV<1). From this narrowed list of candidates we then looked for firms that have recently taken on strong bullish momentum by outperforming the S&P500 over the last month. We did not screen out any sectors or market caps.

The list is ranked from highest to lowest by 1-month performance:

1. Kelly Services, Inc. (NASDAQ:KELYA)

Sector

Industrials

Industry

Staffing & Outsourcing Services

Market Cap

$618M

Beta

1.68

This company offers staffing services around the world. KELYA has a dividend yield of 0.30% & P/BV ratio of 0.94. The company has gained 49.51% over the last month. The short interest was 6.90% as of 10/14/2011.

2. E-House China Holdings Ltd. (NYSE:EJ)

Sector

Real Estate

Industry

Real Estate Services

Market Cap

$719M

Beta

1.70

This company offers real estate services within. EJ has a dividend yield of 2.63% & P/BV ratio of 0.81. The company has gained 46.80% over the last month. The short interest was N/A as of 10/14/2011.

3. Valero Energy Corporation. (NYSE:VLO)

Sector

Energy

Industry

Oil & Gas Refining & Marketing

Market Cap

$15,276M

Beta

1.15

This company is the largest independent petroleum refiner and marketer in North America. VLO has a dividend yield of 0.75% & P/BV ratio of 0.96. The company has gained 44.64% over the last month. The short interest was 2.80% as of 10/14/2011.

4. Synovus Financial Corp. (NYSE:SNV)

Sector

Financial Services

Industry

Banks - Regional - US

Market Cap

$1,234M

Beta

1.30

The company is an integrated financial services with services ranging from asset management to leasing services. SNV has a dividend yield of 2.56% & P/BV ratio of 0.65. The company has gained 43.12% over the last month. The short interest was 9.20% as of 10/14/2011.

5. ArcelorMittal SA. (NYSE:MT)

Sector

Basic Materials

Industry

Steel

Market Cap

$34,295M

Beta

2.18

This company is the largest steel producer in the world. MT has a dividend yield of 2.88% & P/BV ratio of 0.55. The company has gained 37.94 % over the last month. The short interest was 1.20% as of 10/14/2011.

6. Royal Caribbean Cruises, Ltd. (NYSE:RCL)

Sector

Consumer Cyclical

Industry

Resorts & Casinos

Market Cap

$6,604M

Beta

3.21

The company operates two cruise brands, Royal Caribbean International and Celebrity Cruises, in the vacation industry. RCL has a dividend yield of 0.33% & P/BV ratio of 0.79. The company has gained 37.62% over the last month. The short interest was 7.00% as of 10/14/2011.

7. Lincoln National Corp (Radnor. (NYSE:LNC)

Sector

Financial Services

Industry

Insurance - Life

Market Cap

$6,598M

Beta

2.90

This is a holding company with operations ranging from asset management to broadcasting. LNC has a dividend yield of 0.93% & P/BV ratio of 0.49. The company has gained 37.59% over the last month. The short interest was 3.70% as of 10/14/2011.

8. LG.Display Company, Ltd. (NYSE:LPL)

Sector

Technology

Industry

Consumer Electronics

Market Cap

$7,600M

Beta

1.66

The company makes TFT-LCD panels primarily for electronic items ranging from televisions to desktop monitors. LPL has a dividend yield of 1.50% & P/BV ratio of 0.78. The company has gained 37.56% over the last month. The short interest was N/A as of 10/14/2011.

9. Morgan Stanley. (NYSE:MS)

Sector

Financial Services

Industry

Capital Markets

Market Cap

$37,228M

Beta

1.10

This company is a global financial services company with a client base that ranges from retail clients to governments and other large scale institutions. MS has a dividend yield of 1.04% & P/BV ratio of 0.64. The company has gained 36.72 % over the last month. The short interest was 1.80% as of 10/14/2011.

10. Susquehanna Bancshares Inc. (NASDAQ:SUSQ)

Sector

Financial Services

Industry

Banks - Regional - US

Market Cap

$970M

Beta

1.15

This company offers retail and commercial banking through the mid-Atlantic region within the US. The company has a dividend yield of 1.07% & P/BV ratio of 0.48. The SUSQ has gained 36.43% over the last month. The short interest was N/A as of 10/14/2011.

We hope this list helps as investors do their own due diligence on companies with cheap valuations and strong momentum.

Source: 10 Undervalued Dividend Stocks With Strong Bullish Momentum