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I feel that in order to see substantial gains in the market, one must do substantial research to find stocks that are being sold at a true "value." A momentarily bad quarter and shifting market sentiment has pushed the market low, on some stocks more than on others.

When looking for stocks that are "undervalued" there are several facts one can dissect, and even speculation can be used. Many methods are used to find stocks that are considered undervalued, one popular method is PEG (Price/Earnings to Growth). I like to use this ratio because unlike the P/E, it takes into account growth. Below I have screened four stocks that I believe to be undervalued given their < 1 PEG. Recently utilities have not performed as well as other sectors in the market, but I feel the time is now for a huge jump. Here is my analysis of four utility stocks that I feel are undervalued and are poised for a turnaround:

Niska Gas Storage Partners LLC (NKA) is an independent owner and operator of natural gas storage assets in North America. The company owns or contracts for approximately 185.5 billion cubic feet (BCF), of total gas storage capacity. Its assets are located in North American natural gas producing and consuming regions and are connected at points on the gas transmission network, providing access to multiple end-use markets. It stores natural gas for a range of customers, including financial institutions, marketers, pipelines, power generators, utilities and producers of natural gas. The current market price is $9.96 with a book value of $13.31. This represents a 33.63% upside potential. This upside however, does not include its $0.35 quarterly dividend payment yielding 14.06%. NKA also boasts a PEG <1 putting it at a great buy opportunity.

Based on Trailing P/E, NKA currently trades at a 70% discount to its Oil & Gas Transportation Industry peers. Also compared with its industry peers NKA has a Gross margin of 68.62% compared with the industry's average of 29.88%. Operating margin is also higher at 68.96% compared with the industry average of 6.94%. Current EPS is 1.22 with a P/E of 8.2x. For fiscal-year 2013, analysts estimate that NKA will earn $0.34. For the 2nd quarter of fiscal-year 2013, NKA announced earnings per share of $0.00, representing 0% of the total annual estimate. For fiscal year 2014, analysts estimate that NKA's earnings per share will grow by 26% to $0.43.

(Click charts to expand)

From the graph one can see the excruciating 52-week drop of -50.45%, but it appears the stock has bottomed and is ready for a steady rise. Not only has the drop in price created a great buy opportunity for substantial growth, but the dividend yield of 14.02% cannot be ignored especially with a payout ratio of 259%.

Ameren Corporation (AEE) is a utility holding company. The Company's subsidiaries include Union Electric Company, Ameren Illinois Company and Ameren Energy Generating Company. The current market price is $31.26 with a book value of $33.02. This represents a 5.63% upside potential. This upside however, does not include its $0.40 quarterly dividend payment yielding 5.12% with a 68% payout ratio. NKA also boasts a PEG <1 putting it at a great buy opportunity.

AEE's 14.1 trailing P/E is at the low end of its 5-year range (lowest 7.0 to highest 89.2) and EPS is currently 2.26. For fiscal year 2011, analysts estimate that AEE will earn $2.55. For the 3rd quarter of fiscal year 2011, AEE announced earnings per share of $1.18, representing 46% of the total annual estimate. For fiscal year 2012, analysts estimate that AEE's earnings per share will decline by 9% to $2.32. I feel despite the lower estimate this stock will outperform thus pushing the stock even higher. I believe the recent rise in the shares has reflected the investor shift to the utilities sector due to the extraordinary volatility and often sharp declines in the broader market. AEE is no stranger to this shift hence the rise in its share price. On 01/23/12, AEE closed at $31.83, 6.7% below its 52-week high and 24.6% above its 52-week low.

From the graph one can see the rise in confidence and share price giving it an 8.39% 52-week rise. It appears the stock has declined slightly and I believe might dip further (about $30 range). Once it does I believe this stock will be a great buy opportunity for growth and dividend yield. If the price would drop to $30 the dividend yield would jump to nearly 5.5% and the one-year price target would also yield a higher return.

Atlas Pipeline Partners, L.P. (APL) is a provider of natural gas gathering, processing and treating services in the Anadarko and Permian Basins located in the southwestern and midcontinent regions of the United States and a provider of natural gas gathering services in the Appalachian Basin in the northeastern region of the United States. The current market price is $37.26 with a one-year analyst price target of $42.33. This represents a 13.61% upside potential. This upside however, does not include its $0.54 quarterly dividend payment yielding 5.80%. APL also boasts a PEG <1 putting it at a great buy opportunity.

APL's current quarter consensus estimate has increased notably over the past 90 days from 0.33 to 0.45, a gain of 33.5%. This improvement is significantly greater than its Industry average of 0.0% during the same time period. Despite the estimate increase, based on trailing P/E, APL currently trades at an 81% discount to its Oil & Gas Transportation Industry peers. APL has quarterly revenue growth of 53.30% compared with its direct competition; Duke Energy Corp (DUK) at 0.50%, EQT Corp (EQT) at 30.80%, and ONEOK Inc (OKE) with quarterly revenue growth of 22.20%. Also current EPS is exceptional compared with its peers. APL's EPS is 5.15, DUK has an EPS of 1.38, EQT is at 3.09, and OKE's EPS is 3.04. For fiscal year 2011, analysts estimate that APL will earn $4.07. For the 3rd quarter of fiscal year 2011, APL announced earnings per share of $0.87, representing 21% of the total annual estimate. For fiscal year 2012, analysts estimate that APL's earnings per share will decline by 56% to $1.81, which might put pressure on the stock price, but I feel this would only be temporary.

From the graph one can see violent swings, but overall a 54.73% 52-week price change. It appears the stock is experiencing price ceiling pressure, but should break out of the $38 range by the end of Q1 at the latest. This stock has a five-year dividend yield average of 18.30% therefore I have confidence in its current payment of 5.8% sticking around. This stock is a great pick and should see easy growth into at least 2013.

Pennichuck Corporation (PNNW) is engaged primarily in the collection, storage, treatment and distribution of potable water in New Hampshire. The company operates in two segments: regulated water utility operations and non-regulated water management services. During the year ended December 31, 2010, regulated water utility revenue constituted 93% of the company's revenue. The current market price is $29.02 with a $0.19 quarterly dividend payment yielding 2.62% and an 80.00% payout ratio. PNNW also boasts a < 1 PEG further making it a great buy opportunity.

Pennichuck's current ratio of 2.8 is the highest within its Water & Other Utilities Industry, which shows its ability to pay back short-term debt. PNNW's trailing P/E of 36.2 represents a 5% discount to its 5-year average of 38.1. Analysts expect U.S. water utilities to continue to be granted adequate rate hikes to cover rising infrastructure costs for aging water systems. Despite project delays due to a decrease in tax revenue, more budget-strapped municipalities may find it economically advantageous to sell their systems to private companies or establish public-private operating partnerships. Meanwhile, new regulations related to chemicals could boost water rates along with municipal water system partnerships. According to GlobalWater Intelligence, annual spending on desalination will rise to $16 billion by 2020, from $10 billion now. Currently, there are nearly 14,500 desalination plants operating worldwide, with another 244 under construction. I feel this shows a huge potential for this company and its industry. The current market environment offers a great buy opportunity for future growth in price and dividend yield alike.

From the graph see a huge shift upward. The 52-week price change for PNNW is 3.87%, but looking the chart pattern looks like the positive 20-, 50- and 200-day moving averages will more than likely continue. I believe this company will be in the low to mid $30s by year end, and potentially will raise its dividend payment in 2013. PNNW has consistently paid 2.9% for five years and I expect this to continue given the environment for this industry. I feel this stock is a great buy opportunity for both growth and dividend yield.

Source: 4 Undervalued Dividend Utilities To Brighten Your Portfolio