14 Low-Debt Dividend Stocks Undervalued by Cash Flow and Earnings Growth

If you’re looking for sources of dividend income, you may find this list very interesting.

We ran a screen in the search for highly undervalued dividend stocks with low debt. We began by screening for stocks paying dividend yields above 2%, sustainable payout ratios below 35%, and MRQ total debt to assets below 0.2. Then we searched for those with lower TTM P/E, TTM P/CF, and PEG than their industry peers, indicating that the stocks appear relatively undervalued.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

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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 should be trading higher? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. Lockheed Martin Corporation (LMT): Aerospace/Defense Products & Services Industry. Market cap of $23.20B. Dividend yield at 4.35%, payout ratio at 34.77%. MRQ total debt to assets at 0.14. TTM P/E at 9.17 vs. industry average at 15.63. PEG at 0.96 vs. industry average at 1.35. TTM P/CF at 6.82 vs. industry average at 9.85. It's been a rough couple of days for the stock, losing 5.08% over the last week.

2. Northrop Grumman Corporation (NOC): Aerospace/Defense Industry. Market cap of $14.43B. Dividend yield at 3.86%, payout ratio at 26.73%. MRQ total debt to assets at 0.16. TTM P/E at 8.12 vs. industry average at 15.63. PEG at 1.03 vs. industry average at 1.35. TTM P/CF at 6.03 vs. industry average at 9.85. The stock is a short squeeze candidate, with a short float at 6.34% (equivalent to 5.72 days of average volume). It's been a rough couple of days for the stock, losing 6.49% over the last week.

3. Intel Corporation (INTC): Semiconductor Industry. Market cap of $108.43B. Dividend yield at 3.52%, payout ratio at 32.42%. MRQ total debt to assets at 0.03. TTM P/E at 9.34 vs. industry average at 15.43. PEG at 0.84 vs. industry average at 1.04. TTM P/CF at 6.39 vs. industry average at 14.23. The stock has gained 11.56% over the last year.

4. Tower Group Inc. (TWGP): Property & Casualty Insurance Industry. Market cap of $923.14M. Dividend yield at 3.40%, payout ratio at 32.48%. MRQ total debt to assets at 0.09. TTM P/E at 7.75 vs. industry average at 12.41. PEG at 0.40 vs. industry average at 0.96. TTM P/CF at 6.63 vs. industry average at 8.55. The stock is a short squeeze candidate, with a short float at 10.99% (equivalent to 15.49 days of average volume). The stock has gained 1.36% over the last year.

5. A. Schulman, Inc. (SHLM): Specialty Chemicals Industry. Market cap of $565.91M. Dividend yield at 3.39%, payout ratio at 25.73%. MRQ total debt to assets at 0.16. TTM P/E at 13.30 vs. industry average at 13.56. PEG at 0.94 vs. industry average at 1.40. TTM P/CF at 6.85 vs. industry average at 11.29. The stock has performed poorly over the last month, losing 22.64%.

6. General Dynamics Corp. (GD): Aerospace/Defense Products & Services Industry. Market cap of $22.13B. Dividend yield at 3.08%, payout ratio at 25.53%. MRQ total debt to assets at 0.10. TTM P/E at 8.69 vs. industry average at 15.63. PEG at 1.16 vs. industry average at 1.35. TTM P/CF at 7.01 vs. industry average at 9.85. It's been a rough couple of days for the stock, losing 5.06% over the last week.

7. Molson Coors Brewing Company (TAP): Beverages Industry. Market cap of $8.10B. Dividend yield at 2.97%, payout ratio at 23.17%. MRQ total debt to assets at 0.15. TTM P/E at 12.01 vs. industry average at 13.13. PEG at 1.00 vs. industry average at 1.42. TTM P/CF at 9.05 vs. industry average at 12.81. The stock has lost 2.77% over the last year.

8. Quaker Chemical Corporation (KWR): Specialty Chemicals Industry. Market cap of $411.91M. Dividend yield at 2.93%, payout ratio at 31.89%. MRQ total debt to assets at 0.07. TTM P/E at 11.31 vs. industry average at 13.56. PEG at 1.13 vs. industry average at 1.40. TTM P/CF at 8.36 vs. industry average at 11.29. This is a risky stock that is significantly more volatile than the overall market (beta = 2.53). The stock has performed poorly over the last month, losing 25.61%.

9. KLA-Tencor Corporation (KLAC): Semiconductor Equipment & Materials Industry. Market cap of $6.0B. Dividend yield at 2.79%, payout ratio at 17.10%. MRQ total debt to assets at 0.16. TTM P/E at 7.73 vs. industry average at 15.43. PEG at 0.81 vs. industry average at 1.04. TTM P/CF at 6.83 vs. industry average at 14.23. The stock has performed poorly over the last month, losing 10.95%.

10. Applied Materials Inc. (AMAT): Semiconductor Equipment & Materials Industry. Market cap of $15.29B. Dividend yield at 2.77%, payout ratio at 21.57%. MRQ total debt to assets at 0.02. TTM P/E at 9.75 vs. industry average at 15.37. PEG at 0.98 vs. industry average at 1.06. TTM P/CF at 8.29 vs. industry average at 14.19. The stock has gained 6.13% over the last year.

11. Boeing Co. (BA): Aerospace/Defense Products & Services Industry. Market cap of $45.76B. Dividend yield at 2.73%, payout ratio at 33.02%. MRQ total debt to assets at 0.16. TTM P/E at 13.11 vs. industry average at 15.63. PEG at 1.09 vs. industry average at 1.35. TTM P/CF at 8.72 vs. industry average at 9.85. The stock has performed poorly over the last month, losing 12.67%.

12. Exxon Mobil Corporation (XOM): Major Integrated Oil & Gas Industry. Market cap of $350.07B. Dividend yield at 2.62%, payout ratio at 21.61%. MRQ total debt to assets at 0.05. TTM P/E at 9.46 vs. industry average at 16.35. PEG at 1.44 vs. industry average at 1.66. TTM P/CF at 6.64 vs. industry average at 7.04. The stock has performed poorly over the last month, losing 11.87%.

13. The Bank of New York Mellon Corporation (BK): Asset Management Industry. Market cap of $24.64B. Dividend yield at 2.61%, payout ratio at 22.42%. MRQ total debt to assets at 0.09. TTM P/E at 9.30 vs. industry average at 16.09. PEG at 0.81 vs. industry average at 1.16. TTM P/CF at 7.26 vs. industry average at 9.10. It's been a rough couple of days for the stock, losing 12.29% over the last week.

14. The Chubb Corporation (CB): Property & Casualty Insurance Industry. Market cap of $17.20B. Dividend yield at 2.60%, payout ratio at 26.61%. MRQ total debt to assets at 0.08. TTM P/E at 8.67 vs. industry average at 12.41. PEG at 0.90 vs. industry average at 1.66. TTM P/CF at 8.14 vs. industry average at 8.55. The stock has gained 16.27% over the last year.

*Price multiples sourced from Fidelity, dividend data and total debt to assets sourced from Screener.co, 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.