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The S&P 500's performance in 2011 may appear flat, and many sources say that it is, but that is only if you take the number at face value. In reality, the S&P 500 returned 2.1% in 2011. Why the difference? If you say the S&P 500 was flat in 2011, you forgot to count the value of dividends.

Obviously, dividends can make a big difference in how much money a stock actually returns - but so can the valuation. For maximum benefit, investors should look more toward stocks that are undervalued, like those with a low P/E ratio and a low P/B ratio.

Using finviz, we came with a list of stocks that fit this bill - they have P/E ratios under 14, dividend yields over 3%, payout ratios under 50% and betas under 1.0.

Raytheon, Co. (RTN) is a diversified aerospace and defense company with a $16.63 billion market cap. It has a P/E ratio of 9.48 and a P/B ratio of 1.62. RTN pays a 3.58% dividend yield and has a payout ratio of 33.30%. The company has a 0.67 beta and recently traded at $48.09 a share.

Sempra Energy (SRE) is a gas utilities company with a $13.32 billion market cap. It has a P/E ratio of 9.97 and a P/B ratio of 1.38. SRE pays a 3.46% dividend yield and has a payout ratio of 32.71%. The company has a 0.53 beta and recently traded at $55.92 a share.

Edison International (EIX) is an electric utilities company with a $13.21 billion market cap. It has a P/E ratio of 13.74 and a P/B ratio of 1.10. EIX pays a 3.21% dividend yield and has a payout ratio of 43.05%. The company has a 0.66 beta and recently traded at $40.40 a share. Steve Cohen's SAC Capital Advisors pushed its stake in EIX by +10% during the third quarter, bringing the fund's total position in the company to $81.26 million at the end of September.

M&T Bank, Corp. (MTB) is a regional banking company with a $9.95 billion market cap. It has a P/E ratio of 11.47 and a P/B ratio of 1.06. MTB pays a 3.53% dividend yield and has a payout ratio of 41.09%. The company has a 0.82 beta and recently traded at $79.60 a share. Warren Buffett's Berkshire Hathaway (BRK.A) owned a stake worth $376.20 million in MTB at the end of the third quarter.

Harris Corp. (HRS) is a communications equipment company with a $4.25 billion market cap. It has a P/E ratio of 8.47 and a P/B ratio of 1.92. HRS pays a 3.05% dividend yield and has a payout ratio of 23.21%. The company has a 0.96 beta and recently traded at $37.19 a share.

UGI Corp. (UGI) is a diversified utilities company with a $3.31 billion market cap. It has a P/E ratio of 13.92 and a P/B ratio of 1.62. UGI pays a 3.63% dividend yield and has a payout ratio of 48.53%. The company has a 0.43 beta and recently traded at $28.64 a share.

Cleco Corporation (CNL) is an electric utility company with a $2.24 billion market cap. It has a P/E ratio of 12.07 and a P/B ratio of 1.58. CNL pays a 3.40% dividend yield and has a payout ratio of 34.55%. The company has a 0.52 beta and recently traded at $36.45 a share.

Source: 7 Undervalued Stocks With Dividends Over 3%