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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 large-cap stocks paying dividend yields above 2% 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. 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 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 $59.21B. Dividend yield at 5.92%, payout ratio at 35.75%. Levered free cash flow/enterprise value at 12.84% (levered free cash flow at 7.61B and enterprise value at 59.27B). The stock has lost 1.15% over the last year.

2. 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 $24.88B. Dividend yield at 5.20%, payout ratio at 48.86%. Levered free cash flow/enterprise value at 10.26% (levered free cash flow at 2.79B and enterprise value at 27.18B). The stock is a short squeeze candidate, with a short float at 6.18% (equivalent to 7.33 days of average volume). The stock has gained 16.87% over the last year.

3. Eli Lilly & Co. (NYSE:LLY): Develops, manufactures, and sells pharmaceutical products worldwide. Market cap of $45.14B. Dividend yield at 5.03%, payout ratio at 48.65%. Levered free cash flow/enterprise value at 11.00% (levered free cash flow at 4.81B and enterprise value at 43.71B). The stock has gained 17.69% over the last year.

4. Enersis S.A. (NYSE:ENI): Engages in the generation, transmission, and distribution of electricity in Chile, Argentina, Brazil, Colombia, and Peru. Market cap of $11.53B. Dividend yield at 4.42%, payout ratio at 36.67%. Levered free cash flow/enterprise value at 11.35% (levered free cash flow at 1.93B and enterprise value at 17.00B). The stock has lost 24.14% over the last year.

5. Raytheon Co. (NYSE:RTN): Provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services in the United States and internationally. Market cap of $15.51B. Dividend yield at 3.84%, payout ratio at 33.30%. Levered free cash flow/enterprise value at 11.24% (levered free cash flow at 1.88B and enterprise value at 16.72B). The stock has gained 2.17% over the last year.

6. LM Ericsson Telephone Co. (NASDAQ:ERIC): Provides communications equipment, professional services, and multimedia solutions to mobile and fixed networks operators worldwide. Market cap of $31.78B. Dividend yield at 3.80%, payout ratio at 43.46%. Levered free cash flow/enterprise value at 10.91% (levered free cash flow at 2.65B and enterprise value at 24.28B). It's been a rough couple of days for the stock, losing 6.45% over the last week.

7. General Electric Company (NYSE:GE): Operates as a technology, service, and finance company worldwide. Market cap of $173.77B. Dividend yield at 4.14%, payout ratio at 47.38%. Levered free cash flow/enterprise value at 13.08% (levered free cash flow at 71.75B and enterprise value at 548.54B). The stock has lost 3.52% over the last year.

8. Northrop Grumman Corporation (NYSE:NOC): Provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. Market cap of $14.63B. Dividend yield at 3.57%, payout ratio at 30.93%. Levered free cash flow/enterprise value at 15.34% (levered free cash flow at 2.40B and enterprise value at 15.65B). The stock is a short squeeze candidate, with a short float at 5.29% (equivalent to 5.79 days of average volume). The stock has lost 0.29% over the last year.

9. BlackRock, Inc. (NYSE:BLK): Provides its services to institutional, intermediary, and individual investors. Market cap of $30.32B. Dividend yield at 3.25%, payout ratio at 28.64%. Levered free cash flow/enterprise value at 14.45% (levered free cash flow at 4.84B and enterprise value at 33.50B). The stock has lost 3.97% over the last year.

10. AFLAC Inc. (NYSE:AFL): Provides supplemental health and life insurance. Market cap of $20.02B. Dividend yield at 3.08%, payout ratio at 29.90%. Levered free cash flow/enterprise value at 10.15% (levered free cash flow at 2.26B and enterprise value at 22.26B). The stock has lost 21.19% over the last year.

11. Applied Materials Inc. (NASDAQ:AMAT): Provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. Market cap of $13.74B. Dividend yield at 3.04%, payout ratio at 21.17%. Levered free cash flow/enterprise value at 16.95% (levered free cash flow at 1.60B and enterprise value at 9.44B). The stock has performed poorly over the last month, losing 13.49%.

12. The Travelers Companies, Inc. (NYSE: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 $23.04B. Dividend yield at 2.94%, payout ratio at 39.36%. Levered free cash flow/enterprise value at 27.70% (levered free cash flow at 6.84B and enterprise value at 24.69B). The stock has gained 3.93% over the last year.

13. Time Warner Inc. (NYSE:TWX): Operates as a media and entertainment company in the United States and internationally. Market cap of $34.27B. Dividend yield at 2.75%, payout ratio at 32.41%. Levered free cash flow/enterprise value at 21.65% (levered free cash flow at 10.73B and enterprise value at 49.56B). The stock has gained 11.31% over the last year.

14. Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX): Engages in the exploration, mining, and production of mineral resources. Market cap of $36.53B. Dividend yield at 2.59%, payout ratio at 34.67%. Levered free cash flow/enterprise value at 14.11% (levered free cash flow at 5.49B and enterprise value at 38.91B). The stock has lost 31.9% over the last year.

15. Nippon Telegraph & Telephone Corp. (NYSE:NTT): Provides telecommunications services to residential and business customers in Japan. Market cap of $65.66B. Dividend yield at 3.26%, payout ratio at 34.22%. Levered free cash flow/enterprise value at 10.09% (levered free cash flow at 10.24B and enterprise value at 101.49B). The stock has gained 8.91% over the last year.

16. Rio Tinto plc (NYSE:RIO): Engages in finding, mining, and processing mineral resources. Market cap of $92.21B. Dividend yield at 2.38%, payout ratio at 15.43%. Levered free cash flow/enterprise value at 10.80% (levered free cash flow at 11.34B and enterprise value at 104.99B). It's been a rough couple of days for the stock, losing 7.18% over the last week.

17. The McGraw-Hill Companies, Inc. (MHP): Provides various information services for financial, educational, and business information markets worldwide. Market cap of $12.74B. Dividend yield at 2.30%, payout ratio at 34.87%. Levered free cash flow/enterprise value at 10.34% (levered free cash flow at 1.29B and enterprise value at 12.47B). The stock has gained 23.1% over the last year.

18. Best Buy Co. Inc. (NYSE:BBY): Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Market cap of $10.17B. Dividend yield at 2.70%, payout ratio at 19.73%. Levered free cash flow/enterprise value at 14.84% (levered free cash flow at 1.57B and enterprise value at 10.58B). The stock has lost 31.29% over the last year.

19. Marathon Oil Corporation (NYSE:MRO): Operates as an international energy company with operations in the United States, Canada, Africa, the Middle East, and Europe. Market cap of $19.23B. Dividend yield at 2.20%, payout ratio at 34.31%. Levered free cash flow/enterprise value at 20.92% (levered free cash flow at 4.06B and enterprise value at 19.41B). The stock has gained 31.47% over the last year.

20. Xerox Corp. (NYSE:XRX): Engages in the development, manufacture, marketing, service, and finance of document equipment, software, solutions, and services worldwide. Market cap of $11.08B. Dividend yield at 2.13%, payout ratio at 22.77%. Levered free cash flow/enterprise value at 10.06% (levered free cash flow at 1.96B and enterprise value at 19.49B). The stock has lost 31.77% over the last year.

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

Source: 20 Large-Cap Dividend Stocks Undervalued By Levered Free Cash Flows