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One way to gauge a company’s market value is by using the ratio levered free cash flows to enterprise value. Companies with high ratios may be undervalued.

Levered free cash flow is relevant to shareholders because it is the free cash flow available after paying interest on outstanding debt. Enterprise value is the value of the company from all ownership sources, including shareholders and debtholders.

To illustrate this ratio, we ran a screen on stocks paying dividend yields above 4% for those with relatively high ratios of levered free cash flow/enterprise value, possibly indicating that these companies are 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.

(Click chart for more detail)

Do you think these companies are being underestimated? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. AstraZeneca PLC (NYSE:AZN): Develops, and commercializes prescription medicines for cardiovascular, gastrointestinal, infection, neuroscience, oncology, and respiratory and inflammation diseases worldwide. Market cap of $60.01B. Dividend yield at 5.85%, payout ratio at 35.75%. Levered free cash flow/enterprise value at 12.80% (levered free cash flow at 7.61B and enterprise value at 59.43B). The stock has gained 2.28% over the last year.

2. QC Holdings, Inc. (NASDAQ:QCCO): Provides various retail consumer financial products and services in the United States. Market cap of $63.92M. Dividend yield at 5.32%, payout ratio at 45.88%. Levered free cash flow/enterprise value at 22.83% (levered free cash flow at 21.75M and enterprise value at 95.25M). The stock has gained 2.73% over the last year.

3. Lockheed Martin Corporation (NYSE:LMT): Engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, and government information technology in the United States and internationally. Market cap of $25.05B. Dividend yield at 5.17%, payout ratio at 48.86%. Levered free cash flow/enterprise value at 10.19% (levered free cash flow at 2.79B and enterprise value at 27.39B). The stock is a short squeeze candidate, with a short float at 6.18% (equivalent to 7.23 days of average volume). The stock has gained 17.3% over the last year.

4. Eli Lilly & Co. (NYSE:LLY): Develops, manufactures, and sells pharmaceutical products worldwide. Market cap of $45.47B. Dividend yield at 4.99%, payout ratio at 48.65%. Levered free cash flow/enterprise value at 10.88% (levered free cash flow at 4.81B and enterprise value at 44.20B). The stock has had a couple of great days, gaining 5.08% over the last week.

5. Deluxe Corp. (NYSE:DLX): Provides various personalized printed products, promotional products, and merchandising materials to small businesses and financial institutions in the United States, Canada, and Europe. Market cap of $1.14B. Dividend yield at 4.59%, payout ratio at 36.91%. Levered free cash flow/enterprise value at 10.23% (levered free cash flow at 194.34M and enterprise value at 1.90B). This is a risky stock that is significantly more volatile than the overall market (beta = 2.02). The stock is a short squeeze candidate, with a short float at 9.53% (equivalent to 11.52 days of average volume). The stock has gained 5.57% over the last year.

6. RadioShack Corp. (NYSE:RSH): Engages in the retail sale of consumer electronic goods and services through its RadioShack store chain and kiosk operations. Market cap of $1.14B. Dividend yield at 4.37%, payout ratio at 24.47%. Levered free cash flow/enterprise value at 18.97% (levered free cash flow at 214.39M and enterprise value at 1.13B). The stock has lost 38.26% over the last year.

7. Enersis S.A. (NYSE:ENI): Engages in the generation, transmission, and distribution of electricity in Chile, Argentina, Brazil, Colombia, and Peru. Market cap of $11.66B. Dividend yield at 4.37%, payout ratio at 36.67%. Levered free cash flow/enterprise value at 11.13% (levered free cash flow at 1.92B and enterprise value at 17.25B). The stock has lost 21.97% over the last year.

8. TESSCO Technologies Inc. (NASDAQ:TESS): Provides integrated product and supply chain solutions to support the construction, operation, and use of mobility and data wireless systems. Market cap of $107.46M. Dividend yield at 4.34%, payout ratio at 27.50%. Levered free cash flow/enterprise value at 17.05% (levered free cash flow at 16.61M and enterprise value at 97.44M). The stock has lost 8.53% over the last year.

9. American National Insurance Co. (NASDAQ:ANAT): Provides insurance products and services in the United States, the District of Columbia, Puerto Rico, Guam, and American Samoa. Market cap of $1.93B. Dividend yield at 4.27%, payout ratio at 47.36%. Levered free cash flow/enterprise value at 122.37% (levered free cash flow at 1.86B and enterprise value at 1.52B). The stock has lost 10.14% over the last year.

10. Communications Systems Inc. (NASDAQ:JCS): Manufactures and sells modular connecting and wiring devices, and media and rate conversion products. Market cap of $124.34M. Dividend yield at 4.09%, payout ratio at 40.17%. Levered free cash flow/enterprise value at 14.31% (levered free cash flow at 12.40M and enterprise value at 86.67M). The stock has had a couple of great days, gaining 7.86% over the last week.

*Levered free cash flow and enterprise value data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 10 High-Yield Stocks Undervalued By Levered Free Cash Flows