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Looking for undervalued stocks? Value investors look for opportunities to buy stocks that are trading at significant discounts to their fair value, with the assumption that they'll move up to their fair value in the near future. One proxy for fair value is analyst target price.

We ran a screen on stocks paying dividend yields above 2% and sustainable payout ratios below 50% for those trading at steep discounts to their analyst target prices, which may indicate that they are undervalued.

But because target prices are notoriously inflated, we only used the most pessimistic (the lowest) target prices, and for stocks with sufficient analyst coverage we only screened for stocks with 5 or more analyst ratings.

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 potential upside implied by target price.

1. Arcelor Mittal (MT): Engages in the production and marketing of steel worldwide. Market cap of $30.86B. Dividend yield at 3.79%, payout ratio at 45.22%. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $24.50. This implies a current upside of 34.69% from current levels around $18.19. This is a risky stock that is significantly more volatile than the overall market (beta = 2.15). The stock has had a couple of great days, gaining 7.74% over the last week.

2. Timken Co. (TKR): Develops, manufactures, markets, and sells anti-friction bearings and related products and steel products primarily in the United States and Europe. Market cap of $3.90B. Dividend yield at 2.0%, payout ratio at 17.24%. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $52.00. This implies a current upside of 34.33% from current levels around $38.71. This is a risky stock that is significantly more volatile than the overall market (beta = 2.08). The stock has lost 18.11% over the last year.

3. Hartford Financial Services Group Inc. (HIG): Provides insurance and financial services in the United States and internationally. Market cap of $7.49B. Dividend yield at 2.38%, payout ratio at 14.90%. Of the 14 analysts that have set a target price on the stock, the lowest price target stands at $21.00. This implies a current upside of 29.23% from current levels around $16.25. This is a risky stock that is significantly more volatile than the overall market (beta = 2.97). Might be undervalued at current levels, with a PEG ratio at 0.87, and P/FCF ratio at 2.98. The stock has lost 38.33% over the last year.

4. Koppers Holdings Inc. (KOP): Provides carbon compounds and commercial wood treatment products to aluminum, railroad, specialty chemical, utility, rubber, concrete, and steel industries. Market cap of $736.86M. Dividend yield at 2.46%, payout ratio at 32.25%. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $43.00. This implies a current upside of 25.15% from current levels around $34.36. This is a risky stock that is significantly more volatile than the overall market (beta = 2.14). The stock has gained 0.73% over the last year.

5. MetLife, Inc. (MET): Provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. Market cap of $33.89B. Dividend yield at 2.31%, payout ratio at 13.90%. Of the 17 analysts that have set a target price on the stock, the lowest price target stands at $39.00. This implies a current upside of 25.08% from current levels around $31.18. Might be undervalued at current levels, with a PEG ratio at 0.61, and P/FCF ratio at 3.38. The stock has lost 29.01% over the last year.

6. Cameco Corp. (CCJ): Operates as a uranium producer, supplier of conversion services, and fuel manufacturer. Market cap of $7.41B. Dividend yield at 2.09%, payout ratio at 37.33%. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $22.41. This implies a current upside of 24.16% from current levels around $18.05. The stock has had a couple of great days, gaining 5.1% over the last week.

7. Methanex Corp. (MEOH): Engages in the production, marketing, and sale of methanol. Market cap of $2.17B. Dividend yield at 2.89%, payout ratio at 36.85%. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $28.00. This implies a current upside of 22.70% from current levels around $22.82. The stock has lost 20.2% over the last year.

8. Cooper Tire & Rubber Co. (CTB): Manufactures and markets replacement tires in North America and internationally. Market cap of $901.19M. Dividend yield at 2.90%, payout ratio at 30.67%. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $17.00. This implies a current upside of 21.34% from current levels around $14.01. This is a risky stock that is significantly more volatile than the overall market (beta = 2.4). The stock has lost 37.6% over the last year.

9. The Toronto-Dominion Bank (TD): Provides various banking and financial services in North America and internationally. Market cap of $68.25B. Dividend yield at 3.53%, payout ratio at 40.57%. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $90.66. This implies a current upside of 21.19% from current levels around $74.81. The stock has gained 4.07% over the last year.

10. Prudential Financial, Inc. (PRU): Offers various financial products and services in the United States, Asia, Europe, and Latin America. Market cap of $24.21B. Dividend yield at 2.83%, payout ratio at 18.78%. Of the 17 analysts that have set a target price on the stock, the lowest price target stands at $60.00. This implies a current upside of 19.71% from current levels around $50.12. This is a risky stock that is significantly more volatile than the overall market (beta = 2.32). Might be undervalued at current levels, with a PEG ratio at 0.65, and P/FCF ratio at 1.99. The stock has lost 12.98% over the last year.

11. Enersis S.A. (ENI): Engages in the generation, transmission, and distribution of electricity in Chile, Argentina, Brazil, Colombia, and Peru. Market cap of $11.45B. Dividend yield at 4.33%, payout ratio at 36.67%. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $21.00. This implies a current upside of 19.12% from current levels around $17.63. The stock has lost 21.53% over the last year.

12. Grupo Aeroportuario Del Sureste SA de CV (ASR): Holds concessions to operate, maintain, and develop airports in the southeast region of Mexico. Market cap of $1.71B. Dividend yield at 4.48%, payout ratio at 48.36%. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $66.00. This implies a current upside of 17.98% from current levels around $55.94. The stock has gained 4.11% over the last year.

13. Tupperware Brands Corporation (TUP): Operates as a direct seller of various products across a range of brands and categories through an independent sales force. Market cap of $3.18B. Dividend yield at 2.17%, payout ratio at 35.12%. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $66.00. This implies a current upside of 17.92% from current levels around $55.97. The stock has gained 16.78% over the last year.

14. Talisman Energy Inc. (TLM): Engages in the exploration, development, production, transportation, and marketing of crude oil, natural gas, and natural gas liquids. Market cap of $13.73B. Dividend yield at 2.03%, payout ratio at 48.95%. Of the 13 analysts that have set a target price on the stock, the lowest price target stands at $15.00. This implies a current upside of 17.65% from current levels around $12.75. The stock has had a couple of great days, gaining 6.65% over the last week.

15. Apollo Global Management, LLC (APO): A publicly owned investment manager. Market cap of $1.59B. Dividend yield at 2.15%, payout ratio at 21.42%. Of the 11 analysts that have set a target price on the stock, the lowest price target stands at $14.50. This implies a current upside of 16.84% from current levels around $12.41. Might be undervalued at current levels, with a PEG ratio at 0.7, and P/FCF ratio at 2.9. The stock has had a couple of great days, gaining 6.1% over the last week.

16. Cardinal Health, Inc. (CAH): Operates as a healthcare solutions company that provides health care products and services. Market cap of $14.33B. Dividend yield at 2.07%, payout ratio at 30.71%. Of the 16 analysts that have set a target price on the stock, the lowest price target stands at $47.00. This implies a current upside of 15.74% from current levels around $40.61. The stock has gained 8.84% over the last year.

*Target price data sourced from Thomson/First Call (via Yahoo! Finance), all other data sourced from Finviz.

Source: 16 Dividend Stocks Deeply Discounted From Target Price