Do you prefer stocks that pay their fair share in dividend income? For ideas on how to start your own dividend search, we ran a screen.

We began by screening for dividend stocks paying dividend yields above 2% and sustainable payout ratios below 50%. We then screened these names for those that appear undervalued relative to the Graham Number, a measure of a stock's maximum fair value, created by the "godfather of value investing" Benjamin Graham.

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 market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.*

Do you think these stocks offer both value and growth? Use this list as a starting point for your own analysis.

List sorted by potential upside implied by the Graham Number.

** 1. Janus Capital Group, Inc. (JNS):** A publicly owned asset management holding company. Market cap at $1.51B. Price at $8.00. Dividend yield at 2.49%, payout ratio at 19.59%. Current ratio at 5.62. Diluted TTM earnings per share at 0.78, and a MRQ book value per share value at 7.02, implies a Graham Number fair value = sqrt(22.5*0.78*7.02) = $11.10. Based on the stock's price at $8.02, this implies a potential upside of 38.4% from current levels.

** 2. Cascade Corp. (CASC-OLD):** Manufactures loading devices and replacement parts primarily for the lift-truck and construction industry. Market cap at $514.80M. Price at $46.75. Dividend yield at 3.02%, payout ratio at 15.80%. Current ratio at 3.75. Diluted TTM earnings per share at 5.58, and a MRQ book value per share value at 28.02, implies a Graham Number fair value = sqrt(22.5*5.58*28.02) = $59.31. Based on the stock's price at $46.42, this implies a potential upside of 27.77% from current levels.

** 3. Cohu, Inc. (COHU):** Engages in the development, manufacture, sale, and servicing of test handling and burn-in related equipment, and thermal sub-systems for the semiconductor industry worldwide. Market cap at $262.84M. Price at $10.83. Dividend yield at 2.22%, payout ratio at 36.89%. Current ratio at 4.70. Diluted TTM earnings per share at 0.64, and a MRQ book value per share value at 11.96, implies a Graham Number fair value = sqrt(22.5*0.64*11.96) = $13.12. Based on the stock's price at $10.79, this implies a potential upside of 21.63% from current levels.

** 4. MKS Instruments Inc. (MKSI):** Provides instruments, subsystems, and process control solutions that measure, control, power, monitor, and analyze parameters of manufacturing processes worldwide. Market cap at $1.44B. Price at $27.38. Dividend yield at 2.19%, payout ratio at 24.24%. Current ratio at 9.18. Diluted TTM earnings per share at 2.45, and a MRQ book value per share value at 18.86, implies a Graham Number fair value = sqrt(22.5*2.45*18.86) = $32.24. Based on the stock's price at $27.43, this implies a potential upside of 17.55% from current levels.

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

**Disclosure: **I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.