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If you’re looking for dividend stock ideas, here’s a list you may find interesting.

One way to search for potentially undervalued stocks is by using the Graham equation. It was created by the “godfather of value investing” Benjamin Graham to calculate the fair value of a stock. Therefore, stocks trading at significant discounts to their Graham number may be undervalued.

The Graham Number only requires two 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.

We screened dividend stocks with low debt (measured by debt to equity ratios below 0.3). We screened these stocks for those trading at the most significant discounts to their Graham number.

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 Graham number.

1. Fulton Financial Corporation (FULT): Operates as a multi-bank holding company that offers retail and commercial banking products and services in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. Market cap of $1.82B. Dividend yield at 2.20%, payout ratio at 24.05%. Total debt/equity at 0.23. TTM Diluted EPS at $0.71, MRQ Book Value Per Share at $9.93, Graham number at $12.59 (vs. current price at $9.08, implies a potential upside of 38.71%).

2. Southside Bancshares Inc. (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 $326.70M. Dividend yield at 3.63%, payout ratio at 36.36%. Total debt/equity at 0.27. TTM Diluted EPS at $2.28, MRQ Book Value Per Share at $14.74, Graham number at $27.50 (vs. current price at $19.86, implies a potential upside of 38.46%). The stock is a short squeeze candidate, with a short float at 6.11% (equivalent to 15.7 days of average volume). The stock has gained 3.6% over the last year.

3. Peapack-Gladstone Financial Corp. (PGC): Operates as the holding company for Peapack-Gladstone Bank that provides financial, trust, and investment services to individuals and small businesses in New Jersey. Market cap of $90.40M. Dividend yield at 1.95%, payout ratio at 26.48%. Total debt/equity at 0.06. TTM Diluted EPS at $0.76, MRQ Book Value Per Share at $11.48, Graham number at $14.01 (vs. current price at $10.24, implies a potential upside of 36.83%). The stock has lost 18.94% over the last year.

4. Communications Systems Inc. (JCS): Manufactures and sells modular connecting and wiring devices, and media and rate conversion products. Market cap of $120.46M. Dividend yield at 4.20%, payout ratio at 40.17%. Total debt/equity at 0.02. TTM Diluted EPS at $1.48, MRQ Book Value Per Share at $11.39, Graham number at $19.48 (vs. current price at $14.29, implies a potential upside of 36.29%). The stock is a short squeeze candidate, with a short float at 5.23% (equivalent to 9.59 days of average volume). It's been a rough couple of days for the stock, losing 7.98% over the last week.

5. The Edelman Financial Group, Inc. (EF): Provides wealth management and institutional services principally to individuals, corporations, and financial institutions. Market cap of $186.56M. Dividend yield at 2.86%, payout ratio at 44.12%. Total debt/equity at 0.10. TTM Diluted EPS at $0.43, MRQ Book Value Per Share at $7.84, Graham number at $8.71 (vs. current price at $6.40, implies a potential upside of 36.08%). The stock has gained 2.89% over the last year.

6. Murphy Oil Corporation (MUR): Engages in the exploration and production of oil and gas properties worldwide. Market cap of $10.32B. Dividend yield at 2.06%, payout ratio at 20.67%. Total debt/equity at 0.15. TTM Diluted EPS at $4.93, MRQ Book Value Per Share at $45.63, Graham number at $71.14 (vs. current price at $53.31, implies a potential upside of 33.45%). The stock has lost 19.94% over the last year.

7. Preformed Line Products Co. (PLPC): Designs and manufactures products and systems used in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, and information industries worldwide. Market cap of $293.35M. Dividend yield at 1.43%, payout ratio at 13.45%. Total debt/equity at 0.10. TTM Diluted EPS at $5.86, MRQ Book Value Per Share at $40.77, Graham number at $73.32 (vs. current price at $55.77, implies a potential upside of 31.46%). It's been a rough couple of days for the stock, losing 7.71% over the last week.

8. Washington Banking Co. (WBCO): Operates as the bank holding company for Whidbey Island Bank that provides community commercial banking services in northwestern Washington. Market cap of $171.31M. Dividend yield at 1.79%, payout ratio at 22.04%. Total debt/equity at 0.15. TTM Diluted EPS at $0.91, MRQ Book Value Per Share at $10.51, Graham number at $14.67 (vs. current price at $11.16, implies a potential upside of 31.45%). It's been a rough couple of days for the stock, losing 5.26% over the last week.

9. Miller Industries Inc. (MLR): Engages in the manufacture and sale of vehicle towing and recovery equipment in North America and internationally. Market cap of $202.88M. Dividend yield at 2.82%, payout ratio at 14.43%. Total debt/equity at 0.0. TTM Diluted EPS at $1.61, MRQ Book Value Per Share at $13.73, Graham number at $22.30 (vs. current price at $17.02, implies a potential upside of 31.03%). It's been a rough couple of days for the stock, losing 14.26% over the last week.

10. Ecology & Environment, Inc. (EEI): Provides professional services to the government and private sectors worldwide. Market cap of $66.88M. Dividend yield at 3.0%, payout ratio at 28.21%. Total debt/equity at 0.04. TTM Diluted EPS at $1.65, MRQ Book Value Per Share at $11.66, Graham number at $20.81 (vs. current price at $16.00, implies a potential upside of 30.04%). The stock has gained 26.08% over the last year.

11. National Bankshares Inc. (NKSH): Operates as the holding company for the National Bank of Blacksburg (NBB), a chartered national bank that provides a range of retail and commercial banking services to individuals, businesses, non-profits, and local governments in Virginia. Market cap of $177.32M. Dividend yield at 3.99%, payout ratio at 39.79%. Total debt/equity at 0.0. TTM Diluted EPS at $2.38, MRQ Book Value Per Share at $20.44, Graham number at $33.08 (vs. current price at $25.55, implies a potential upside of 29.49%). The stock is a short squeeze candidate, with a short float at 6.21% (equivalent to 30.94 days of average volume). The stock has lost 5.3% over the last year.

12. MKS Instruments Inc. (MKSI): Provides instruments, subsystems, and process control solutions that measure, control, power, monitor, and analyze parameters of manufacturing processes worldwide. Market cap of $1.37B. Dividend yield at 2.14%, payout ratio at 16.69%. Total debt/equity at 0.0. TTM Diluted EPS at $2.73, MRQ Book Value Per Share at $18.54, Graham number at $33.75 (vs. current price at $26.12, implies a potential upside of 29.20%). The stock has had a good month, gaining 12.01%.

13. The Travelers Companies, Inc. (TRV): Provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States. Market cap of $23.49B. Dividend yield at 2.88%, payout ratio at 39.36%. Total debt/equity at 0.26. TTM Diluted EPS at $3.91, MRQ Book Value Per Share at $60.98, Graham number at $73.24 (vs. current price at $56.92, implies a potential upside of 28.68%). The stock has had a good month, gaining 12.89%.

14. Stage Stores Inc. (SSI): Operates as a specialty department store retailer that offers branded and private label apparel, accessories, cosmetics, and footwear for women, men, and children in the United States. Market cap of $410.65M. Dividend yield at 2.54%, payout ratio at 31.80%. Total debt/equity at 0.14. TTM Diluted EPS at $0.96, MRQ Book Value Per Share at $13.15, Graham number at $16.85 (vs. current price at $13.20, implies a potential upside of 27.68%). The stock is a short squeeze candidate, with a short float at 15.39% (equivalent to 11.28 days of average volume). It's been a rough couple of days for the stock, losing 11.47% over the last week.

15. Prosperity Bancshares Inc. (PRSP): Operates as the holding company for Prosperity Bank that provides retail and commercial banking services to small and medium-sized businesses and consumers. Market cap of $1.74B. Dividend yield at 2.10%, payout ratio at 23.72%. Total debt/equity at 0.10. TTM Diluted EPS at $2.94, MRQ Book Value Per Share at $32.87, Graham number at $46.63 (vs. current price at $37.07, implies a potential upside of 25.79%). The stock is a short squeeze candidate, with a short float at 14.36% (equivalent to 15.74 days of average volume). The stock has gained 11.69% over the last year.

*EPS and BVPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 15 Low-Debt Dividend Stocks Undervalued By Graham