Do you prefer stocks that pay large dividend income? For a closer look at big dividend names, we ran a screen.

We began by screening for stocks paying dividend yields above 4% and sustainable payout ratios below 50%. Then to find those stocks that appear undervalued, we searched for those that are also trading at steep discounts to their Graham Number, a measure of 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 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 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. CenterPoint Energy, Inc. (NYSE:CNP):** Operates as a public utility holding company in the United States. Market cap at $8.24B. Price at $19.52. Dividend yield at 4.19%, payout ratio at 43.68%. Diluted TTM earnings per share at 3.17, and a MRQ book value per share value at 9.91, implies a Graham Number fair value = sqrt(22.5*3.17*9.91) = $26.59. Based on the stock's price at $19.17, this implies a potential upside of 38.69% from current levels.

** 2. Dime Community Bancshares Inc. (NASDAQ:DCOM):** Operates as the holding company for The Dime Savings Bank of Williamsburgh that provides financial services and loans primarily for multifamily housing. Market cap at $476.91M. Price at $13.90. Dividend yield at 4.13%, payout ratio at 39.95%. Diluted TTM earnings per share at 1.4, and a MRQ book value per share value at 10.78, implies a Graham Number fair value = sqrt(22.5*1.4*10.78) = $18.43. Based on the stock's price at $13.47, this implies a potential upside of 36.8% from current levels.

** 3. Gannett Co., Inc. (NYSE:GCI):** Operates as a media and marketing solutions company in the United States and internationally. Market cap at $3.26B. Price at $13.73. Dividend yield at 5.82%, payout ratio at 12.47%. Diluted TTM earnings per share at 1.89, and a MRQ book value per share value at 9.82, implies a Graham Number fair value = sqrt(22.5*1.89*9.82) = $20.44. Based on the stock's price at $15.04, this implies a potential upside of 35.87% from current levels.

* 4. SeaCube Container Leasing Ltd. (NYSE:BOX-OLD):* Operates as a container leasing company worldwide. Market cap at $347.77M. Price at $17.50. Dividend yield at 6.07%, payout ratio at 47.53%. Diluted TTM earnings per share at 1.96, and a MRQ book value per share value at 10.87, implies a Graham Number fair value = sqrt(22.5*1.96*10.87) = $21.89. Based on the stock's price at $16.86, this implies a potential upside of 29.86% from current levels.

** 5. Harte-Hanks Inc. (NYSE:HHS):** Operates as a direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to local, regional, national, and international customer and business-to-business marketers. Market cap at $512.69M. Price at $8.38. Dividend yield at 4.17%, payout ratio at 46.09%. Diluted TTM earnings per share at 0.7, and a MRQ book value per share value at 7.11, implies a Graham Number fair value = sqrt(22.5*0.7*7.11) = $10.58. Based on the stock's price at $8.26, this implies a potential upside of 28.11% from current levels.

** 6. Public Service Enterprise Group Inc. (NYSE:PEG):** Operates in the energy industry primarily in the northeastern and mid Atlantic United States. Market cap at $15.22B. Price at $30.43. Dividend yield at 4.72%, payout ratio at 49.25%. Diluted TTM earnings per share at 2.96, and a MRQ book value per share value at 20.3, implies a Graham Number fair value = sqrt(22.5*2.96*20.3) = $36.77. Based on the stock's price at $29.69, this implies a potential upside of 23.84% from current levels.

** 7. Merchants Bancshares Inc. (NASDAQ:MBVT):** Operates as the bank holding company for The Merchants Bank that provides commercial banking products and services in Vermont. Market cap at $165.98M. Price at $26.98. Dividend yield at 4.21%, payout ratio at 45.19%. Diluted TTM earnings per share at 2.35, and a MRQ book value per share value at 17.57, implies a Graham Number fair value = sqrt(22.5*2.35*17.57) = $30.48. Based on the stock's price at $26.29, this implies a potential upside of 15.94% from current levels.

* 8. Universal Health Realty Income Trust (NYSE:UHT):* Operates as a real estate investment trust in the United States. Market cap at $489.82M. Price at $39.11. Dividend yield at 6.31%, payout ratio at 41.61%. Diluted TTM earnings per share at 5.83, and a MRQ book value per share value at 14.91, implies a Graham Number fair value = sqrt(22.5*5.83*14.91) = $44.22. Based on the stock's price at $38.33, this implies a potential upside of 15.38% 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.