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By Rebecca Lipman

Do you prefer stocks that pay part of their return in dividend income? If so, here's a list you may be interested in.

We began by screening the S&P 500 index for those that pay out dividends, with yields between 0.5% and 7% and sustainable payout ratios below 50%.

We then screened for those that may be undervalued, by comparing price trends to changes in EPS estimates over the last month.

Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don't match up, a mispricing may have occurred.

We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued.

For an interactive version of this chart, click on the image below.

(click image to enlarge)

Tool provided by Kapitall (www.kapitall.com).

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

List sorted by dividend yield. List Average 1-Year Return: 8%

1. The Allstate Corporation (NYSE:ALL): Engages in the personal property and casualty insurance, life insurance, retirement, and investment products businesses, primarily in the United States. Market cap at $18.25B, most recent closing price at $37.64. Dividend yield at 2.34%. Payout ratio: 22.53%. The EPS estimate for the company's current year increased from 3.73 to 4.14 over the last 30 days, an increase of 10.99%. This increase came during a time when the stock price changed by 10.57% (from 34.15 to 37.76 over the last 30 days).

2. Chesapeake Energy Corporation (NYSE:CHK): Engages in the acquisition, development, exploration, and production of natural gas and oil properties in the United States. Market cap at $12.84B, most recent closing price at $19.30. Dividend yield at 1.81%. Payout ratio: 10.68%. The EPS estimate for the company's current year increased from 0.34 to 0.44 over the last 30 days, an increase of 29.41%. This increase came during a time when the stock price changed by 6.83% (from 18.15 to 19.39 over the last 30 days).

3. Sunoco, Inc. (NYSE:SUN): Through its subsidiaries, refines and markets petroleum products, and manufactures chemicals in the United states. Market cap at $4.9B, most recent closing price at $46.81. Dividend yield at 1.71%. The EPS estimate for the company's current year increased from 0.98 to 1.19 over the last 30 days, an increase of 21.43%. This increase came during a time when the stock price changed by -2.24% (from 47.82 to 46.75 over the last 30 days).

4. Helmerich & Payne Inc. (NYSE:HP): Engages in the contract drilling of oil and gas wells in the United States and internationally. Market cap at $4.89B, most recent closing price at $46.25. Dividend yield at 0.61%. Payout ratio: 5.53%. The EPS estimate for the company's current year increased from 4.81 to 5.07 over the last 30 days, an increase of 5.41%. This increase came during a time when the stock price changed by 2.4% (from 45.77 to 46.87 over the last 30 days).

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

Source: 4 S&P Dividend Stocks Undervalued By EPS Trends