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Do you prefer stocks that pay big dividends? For a closer look at stocks with big dividend yields, we ran a screen.

We began by screening for stocks paying dividend yields above 4% and sustainable payout ratios below 50%. We then screened for those with low-volatility, with average intra-day volatility over the last month under 2% (meaning, on average, these stocks have traded within a 2% range each day).

We then screened for those that appear undervalued relative to the Graham Number. The Graham Number is 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.

(click to enlarge)

Do you think these stocks pay attractive dividends? 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 $8.65B, most recent closing price at $20.24. Dividend yield at 4.00%, payout ratio at 44.07%. Average intra-day volatility over the last month at 1.76%. Diluted TTM earnings per share at 3.16, and a MRQ book value per share value at 10.03, implies a Graham Number fair value = sqrt(22.5*3.16*10.03) = $26.70. Based on the stock's price at $19.62, this implies a potential upside of 36.11% from current levels.

2. Universal Health Realty Income Trust (NYSE:UHT): Operates as a real estate investment trust in the United States. Market cap at $495.14M, most recent closing price at $39.08. Dividend yield at 6.24%, payout ratio at 38.87%. Average intra-day volatility over the last month at 1.59%. Diluted TTM earnings per share at 6.25, and a MRQ book value per share value at 15.06, implies a Graham Number fair value = sqrt(22.5*6.25*15.06) = $46.02. Based on the stock's price at $38.29, this implies a potential upside of 20.19% from current levels.

3. Public Service Enterprise Group Inc. (NYSE:PEG): Operates in the energy industry primarily in the northeastern and mid Atlantic United States. Market cap at $15.57B, most recent closing price at $30.78. Dividend yield at 4.61%, payout ratio at 48.61%. Average intra-day volatility over the last month at 1.42%. Diluted TTM earnings per share at 2.89, and a MRQ book value per share value at 21, implies a Graham Number fair value = sqrt(22.5*2.89*21) = $36.95. Based on the stock's price at $31.68, this implies a potential upside of 16.64% from current levels.

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

Source: 3 Low-Risk High Yield Stocks Undervalued By The Graham Number