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TheStreet Open House

5 Undervalued Companies With High Dividends: Mattel, Chevron, More

NEW YORK (TheStreet) -- There are a number of great companies in the market today. By using the ModernGraham Valuation Model, I've selected the five highest dividend yields among undervalued companies we review.

Each company has been determined to be suitable for defensive investors -- investors who are not able or willing to do substantial research into individual investments, and therefore need to select only the companies that present the least amount of risk. Enterprising investors, on the other hand, are able to do substantial research and can select companies that present a moderate (though still low) amount of risk. Each company suitable for the defensive investor is also suitable for enterprising investors.

Now let's turn to the companies.

1. Mattel (MAT)

With a dividend yield of 3.92%, Mattel is suitable for either the defensive investor or the enterprising investor. For the defensive investor, the only concern is the high PB ratio, while the company passes all of the requirements of the enterprising investor. As a result, value investors seeking to follow Benjamin Graham's methods should feel comfortable proceeding with further research into the company, including comparing the company to Hasbro (HAS).  

From the valuation side of things, Mattel appears significantly undervalued after growing its EPSmg (normalized earnings) from $1.35 in 2009 to $2.25 for 2013. This demonstrated level of growth is greater than the market's implied estimate of 4.37% and leads our valuation model to return an estimate of intrinsic value that is well above the market price.


MAT Chart

MAT data by YCharts

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