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Interested in earning some dividend income with your stock investments? For ideas on how to search for dividend stocks, we ran a screen you might find interesting.

We screened for dividend stocks paying dividend yields above 2% and sustainable payout ratios below 50%. Because higher levels of company debt endanger the company's dividend, we also searched for companies with low levels of debt.

Finally, we screened for stocks that appear undervalued relative to the Graham Number.

The Graham Number was created by the "godfather of value investing" Benjamin Graham as a calculation for maximum fair value. It is based off of a stock's EPS and book value per share (BVPS).

Graham Number = SQRT(22.5 x TTM EPS x MRQ BVPS)

The equation assumes that P/E should not be higher than 15 and P/BV should not be higher than 1.5. Stocks trading well below their Graham Number may be 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 pay reliable dividend income? Use this list as a starting point for your own analysis.

1. Applied Materials Inc. (AMAT): Provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic, and related industries worldwide. Dividend yield at 2.47%, payout ratio at 21.17%. Total debt/equity at 0.22. Diluted TTM earnings per share at 1.45, and a MRQ book value per share value at 6.74, implies a Graham Number fair value = sqrt(22.5*1.45*6.74) = $14.83. Based on the stock's price at $12.89, this implies a potential upside of 15.04% from current levels.

2. Sierra Bancorp (NASDAQ:BSRR): Operates as the bank holding company for Bank of the Sierra that offers retail and commercial banking services in the central and southern sections of the San Joaquin Valley in California. Dividend yield at 2.48%, payout ratio at 43.34%. Total debt/equity at 0.18. Diluted TTM earnings per share at 0.55, and a MRQ book value per share value at 11.95, implies a Graham Number fair value = sqrt(22.5*0.55*11.95) = $12.16. Based on the stock's price at $9.7, this implies a potential upside of 25.37% from current levels.

3. Citizens & Northern Corp. (NASDAQ:CZNC): Operates as the holding for Citizens & Northern Bank, which provides various banking and mortgage products and services to individual and corporate customers in north central Pennsylvania and southern New York. Dividend yield at 3.50%, payout ratio at 29.70%. Total debt/equity at 0.12. Diluted TTM earnings per share at 1.92, and a MRQ book value per share value at 13.9, implies a Graham Number fair value = sqrt(22.5*1.92*13.9) = $24.50. Based on the stock's price at $20.59, this implies a potential upside of 19.01% from current levels.

4. Ennis Inc. (NYSE:EBF): Engages in the production and sale of business forms, other business products, and apparel. Dividend yield at 3.65%, payout ratio at 42.57%. Total debt/equity at 0.14. Diluted TTM earnings per share at 1.46, and a MRQ book value per share value at 13.98, implies a Graham Number fair value = sqrt(22.5*1.46*13.98) = $21.43. Based on the stock's price at $16.55, this implies a potential upside of 29.49% from current levels.

5. Eca Marcellus Trust I (NYSE:ECT): Holds royalty interests in producing and development horizontal natural gas wells for Energy Corporation of America. Dividend yield at 10.53%, payout ratio at 0.00%. Total debt/equity at 0. Diluted TTM earnings per share at 2.45, and a MRQ book value per share value at 17.83, implies a Graham Number fair value = sqrt(22.5*2.45*17.83) = $31.35. Based on the stock's price at $22.4, this implies a potential upside of 39.96% from current levels.

6. Ecology & Environment, Inc. (NASDAQ:EEI): Provides professional services to the government and private sectors worldwide. Dividend yield at 2.87%, payout ratio at 31.36%. Total debt/equity at 0.08. Diluted TTM earnings per share at 1.48, and a MRQ book value per share value at 12.01, implies a Graham Number fair value = sqrt(22.5*1.48*12.01) = $20.0. Based on the stock's price at $16.58, this implies a potential upside of 20.62% from current levels.

7. Fulton Financial Corp. (NASDAQ:FULT): Operates as a multi-bank holding company that offers retail and commercial banking products and services in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. Dividend yield at 2.48%, payout ratio at 24.06%. Total debt/equity at 0.23. Diluted TTM earnings per share at 0.73, and a MRQ book value per share value at 9.96, implies a Graham Number fair value = sqrt(22.5*0.73*9.96) = $12.79. Based on the stock's price at $9.65, this implies a potential upside of 32.54% from current levels.

8. HCC Insurance Holdings Inc. (NYSE:HCC): Provides property and casualty, surety, group life, accident, and health insurance coverage, as well as related agency and reinsurance brokerage services to commercial customers and individuals worldwide. Dividend yield at 2.10%, payout ratio at 24.34%. Total debt/equity at 0.15. Diluted TTM earnings per share at 2.42, and a MRQ book value per share value at 30.56, implies a Graham Number fair value = sqrt(22.5*2.42*30.56) = $40.79. Based on the stock's price at $29.59, this implies a potential upside of 37.86% from current levels.

9. Interactive Brokers Group, Inc. (NASDAQ:IBKR): Operates as an automated global electronic market maker and broker. Dividend yield at 2.52%, payout ratio at 28.49%. Total debt/equity at 0.19. Diluted TTM earnings per share at 1.4, and a MRQ book value per share value at 12.59, implies a Graham Number fair value = sqrt(22.5*1.4*12.59) = $19.91. Based on the stock's price at $15.67, this implies a potential upside of 27.09% from current levels.

10. Communications Systems Inc. (NASDAQ:JCS): Together with its subsidiaries, manufactures and sells modular connecting and wiring devices, and media and rate conversion products. Dividend yield at 3.91%, payout ratio at 41.20%. Total debt/equity at 0.02. Diluted TTM earnings per share at 1.45, and a MRQ book value per share value at 11.67, implies a Graham Number fair value = sqrt(22.5*1.45*11.67) = $19.51. Based on the stock's price at $15.05, this implies a potential upside of 29.65% from current levels.

11. ManTech International Corporation (NASDAQ:MANT): Provides technologies and solutions for national security programs in the United States and internationally. Dividend yield at 2.37%, payout ratio at 22.58%. Total debt/equity at 0.19. Diluted TTM earnings per share at 3.73, and a MRQ book value per share value at 29.07, implies a Graham Number fair value = sqrt(22.5*3.73*29.07) = $49.39. Based on the stock's price at $35.6, this implies a potential upside of 38.75% from current levels.

12. Miller Industries Inc. (NYSE:MLR): Engages in the manufacture and sale of vehicle towing and recovery equipment in North America and internationally. Dividend yield at 2.82%, payout ratio at 19.37%. Total debt/equity at 0. Diluted TTM earnings per share at 1.78, and a MRQ book value per share value at 13.82, implies a Graham Number fair value = sqrt(22.5*1.78*13.82) = $23.53. Based on the stock's price at $16.85, this implies a potential upside of 39.62% from current levels.

13. NL Industries Inc. (NYSE:NL): Operates in the component products industry in the United States, Canada, and Taiwan. Dividend yield at 3.17%, payout ratio at 19.99%. Total debt/equity at 0.18. Diluted TTM earnings per share at 2.44, and a MRQ book value per share value at 8.08, implies a Graham Number fair value = sqrt(22.5*2.44*8.08) = $21.06. Based on the stock's price at $15.92, this implies a potential upside of 32.3% from current levels.

14. Rimage Corp. (RIMG): Provides workflow-integrated digital publishing systems that are used by businesses to produce recordable CD, DVD, and blu-ray discs with customized content and durable disc labeling. Dividend yield at 5.49%, payout ratio at 41.77%. Total debt/equity at 0. Diluted TTM earnings per share at 0.71, and a MRQ book value per share value at 13.67, implies a Graham Number fair value = sqrt(22.5*0.71*13.67) = $14.78. Based on the stock's price at $12.28, this implies a potential upside of 20.34% from current levels.

15. Sims Metal Management Limited (SMS): Operates in the metal recycling industry. Dividend yield at 3.18%, payout ratio at 37.43%. Total debt/equity at 0.1. Diluted TTM earnings per share at 1, and a MRQ book value per share value at 15.18, implies a Graham Number fair value = sqrt(22.5*1*15.18) = $18.48. Based on the stock's price at $15.26, this implies a potential upside of 21.11% from current levels.

16. Staples, Inc. (NASDAQ:SPLS): Operates as an office products company. Dividend yield at 2.69%, payout ratio at 28.03%. Total debt/equity at 0.28. Diluted TTM earnings per share at 1.37, and a MRQ book value per share value at 10.24, implies a Graham Number fair value = sqrt(22.5*1.37*10.24) = $17.77. Based on the stock's price at $14.81, this implies a potential upside of 19.96% from current levels.

17. Superior Industries International, Inc. (NYSE:SUP): Designs, develops, manufactures, sells, and supplies cast aluminum road wheels to automobile and light truck manufacturers primarily in North America. Dividend yield at 3.37%, payout ratio at 35.16%. Total debt/equity at 0. Diluted TTM earnings per share at 1.81, and a MRQ book value per share value at 15.63, implies a Graham Number fair value = sqrt(22.5*1.81*15.63) = $25.23. Based on the stock's price at $19.1, this implies a potential upside of 32.09% from current levels.

18. Molson Coors Brewing Company (NYSE:TAP): Distributes beer brands. Dividend yield at 2.92%, payout ratio at 31.45%. Total debt/equity at 0.25. Diluted TTM earnings per share at 3.26, and a MRQ book value per share value at 43.61, implies a Graham Number fair value = sqrt(22.5*3.26*43.61) = $56.56. Based on the stock's price at $43.65, this implies a potential upside of 29.57% from current levels.

19. 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. Dividend yield at 3.32%, payout ratio at 26.93%. Total debt/equity at 0.03. Diluted TTM earnings per share at 1.81, and a MRQ book value per share value at 11.71, implies a Graham Number fair value = sqrt(22.5*1.81*11.71) = $21.84. Based on the stock's price at $18.14, this implies a potential upside of 20.38% from current levels.

20. First Financial Corp. (NASDAQ:THFF): Provides various financial services. Dividend yield at 2.74%, payout ratio at 34.56%. Total debt/equity at 0.11. Diluted TTM earnings per share at 2.83, and a MRQ book value per share value at 27.11, implies a Graham Number fair value = sqrt(22.5*2.83*27.11) = $41.55. Based on the stock's price at $34.27, this implies a potential upside of 21.24% from current levels.

*BVPS and EPS data sourced from Yahoo Finance, all other data sourced from Finviz.

Source: 20 Low Debt Dividend Stocks Undervalued By The Graham Number