3 High-Yield Stocks Undervalued By Levered Free Cash Flow

Do you prefer stocks that pay handsome dividends? For a closer look at high dividend yield stocks, we ran a screen. We began by screening for high dividend yield stocks: those paying dividend yields above 4% and sustainable payout ratios below 50%. We screened for stocks that appear undervalued relative to their cash flows, indicated by high ratios of levered free cash flow/enterprise value. Levered free cash flow is the free cash flow after deducting interest payments on outstanding debt. Enterprise value is the sum of the firm's value from all ownership sources: market cap, outstanding debt, and preferred shares. When companies have ratios of levered free cash flow/enterprise value in excess of 10%, it may indicate that the company as a whole is being undervalued. For an ‪interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research. Do you think these stocks... Read more