The only thing better than dividend-paying enterprises are the most undervalued dividend stocks to buy. Combining both a steady stream of shareholder rewards with a discount relative to a specific company’s underlying industry, investors reeling from the downside of last year should pay close attention to this list.

Now, because we’re dealing with multiple variables, let’s define our framework. First, regarding the value component of the most undervalued dividend stocks to buy, I’m taking the literal approach. Using Gurufocus.com’s discount ranking (on a trailing-12-month earnings basis) screener, I’ve arranged the below securities based on their sector-relative value proposition.

Second, I’m covering enterprises that pay out a forward yield of at least 3% but no more than 10%. This way, I’m not going to waste your time with sub-1% dividend-paying securities. As well, I’m not leading you to 30% yielding monsters that will implode tomorrow. So, if you’re ready to do some bargain hunting for income, below are the most undervalued dividend stocks to buy.

Jackson Financial (JXN)

Based in Michigan, Jackson Financial (NYSE:JXN) sells annuities through financial advisors and brokers. According to Gurufocus.com, JXN trades at a trailing multiple of 0.55. In contrast, the sector median stands at 12.85.

Currently, Jackson’s earnings discount rates better than over 99% of the competition. As well, JXN trades at 0.24 times sales and 0.4 times book value. Both stats rate well below their respective sector median. Finally, Jackson represents an extremely profitable enterprise, given its net margin of 43%. In the trailing year, JXN gained nearly 12% of its equity value. Therefore, it ranks among the most undervalued dividend stocks to buy.

Per data from Dividend.com, Jackson carries a forward yield of 5.13%. Notably, its payout ratio sits at only 11.31%, reflecting a very sustainable passive income. To be fair, the company suffers from a consensus hold rating. As well, analysts’ average price target implies about 9% downside from here. Still, JXN has been a top performer in the trailing year, thus warranting a second look.

Sinclair Broadcast (SBGI)

Headquartered in Baltimore, Maryland, Sinclair Broadcast (NASDAQ:SBGI) is a telecommunications conglomerate. Per its public profile, Sinclair represents the second-largest television station operator in the U.S. by the number of stations. According to Gurufocus.com, the market prices SBGI at a trailing multiple of 0.58. In contrast, the sector median stands at 16 times.

Based on discounts against trailing earnings, Sinclair ranks better than nearly 99% of the competition. Also, it’s worth pointing out that SBGI trades at 4.9 times forward earnings. In terms of discounts against forward earnings, Sinclair rates better than over 90% of its peers. Therefore, it makes an interesting case for most undervalued dividend stocks to buy. Notably, the telecom firm carries a forward yield of 4.94%, considerably higher than the communication sector’s average yield of 2.62%. Also, Sinclair enjoys a low payout ratio of 22.2%, making the dividend more credible.

Please be warned, though, that Wall Street rates SBGI as a consensus moderate sell. That said, Sinclair gained 32% so far this year, frustrating the bears.

City Office REIT (CIO)

Headquartered in Vancouver, British Columbia, City Office REIT (NYSE:CIO) is an internally managed real estate company focused on acquiring, owning, and operating high-quality office properties located primarily in metropolitan areas in the southern and western U.S. Per Gurufocus.com, CIO trades hands at 0.92-times trailing earnings. For comparison, the sector median stands at 12.7 times.

Focusing on the discount against earnings, City Office ranks better than 99.2% of sector peers. Also, it’s worth mentioning that CIO trades at 2.38 times sales. In contrast, the underlying industry’s median price-to-sales ratio pings at 7.3 times. Therefore, speculators may be intrigued. Making CIO one of the most undervalued dividend stocks to buy.

Currently, City Office carries a forward yield of 8.41%, beating out the real estate sector’s average yield of 4.46%. However, it has no current streak of consecutive annual dividend increases. As well, its payout ratio rates in the stratosphere, causing sustainability doubts. Still, before you dismiss CIO, Wall Street analysts rate the firm as a consensus moderate buy. In addition, their average price target implies a potential upside of nearly 30%.

TPG Inc (TPG)

Based in Fort Worth, Texas, TPG Inc (NASDAQ:TPG) bills itself as a leader in the alternative asset space. From its website, TPG manages $135 billion in assets through a principled focus on innovation. Data from Gurufocus.com reveals that the company’s stock is priced at 1.21 times trailing earnings. In contrast, the sector median stands at 11.54 times.

In terms of discount against earnings, TPG ranks better than 97.6% of its peers. Additionally, the stock trades hands at 1.65 times trailing sales. This metric slips well below the sector median price-to-sales ratio of 6.38 times. Therefore, investors interested in the asset management space may consider TPG as one of the most undervalued dividend stocks to buy.

Right now, the company carries a forward yield of 3.31%. To be fair, this level is modest compared to the other examples of the most undervalued dividend stocks to buy. However, its payout ratio of 45.2% offers reasonable credibility. Finally, Wall Street analysts rate shares as a consensus moderate buy. Further, their average price target of $38 implies nearly 21% upside potential.

Safe Bulkers (SB)

A shipping firm, Safe Bulkers (NYSE:SB) provides marine dry bulk transportation services through its subsidiaries. Data from Gurufocus.com reveals that the market prices SB at a trailing multiple of 1.98. For comparison, the sector median’s price-earnings ratio pings at 12.59 times.

In terms of discount against earnings, Safe Bulkers ranks better than 92.75% of its peers. Adding to this undervalued profile, the company’s shares trade at 0.5 times book value. In contrast, the sector median stands at 1.32 times. If you prefer greater passive income at a sharply discounted (and thus risky) price, SB could be one of the most undervalued dividend stocks to buy.

Presently, the company offers a forward yield of 6.33%. To be fair, Safe Bulkers only has one year of rising dividends, which is nothing. However, its payout ratio sits at 16.35%, reflecting confidence in the high yield. However, when it comes to analyst sentiment, this is where investors need to be committed to their contrarianism. The sole covering analyst rates it a sell with a 10% downside warning. However, SB gained over 10% of its equity value since the January opener.

Danaos (DAC)

Another major player in the shipping industry, Danaos (NYSE:DAC) commands an impressive fleet of 69 container vessels. According to Gurufocus.com, DAC trades at a trailing multiple of 2.1. In contrast, the sector median stands at 12.59 times. Notably, the investment resource also pegs DAC as modestly undervalued based on its proprietary calculation for fair market value.

As a discount to earnings, Danaos ranks better than 91.6% of its peers. Moreover, the company features other attractive attributes. For instance, the market prices DAC at 0.49 times book value. In contrast, the sector median value stands at 1.32 times. Therefore, DAC could very well be an attractive idea for most undervalued dividend stocks to buy.

At the moment, Danaos carries a forward yield of 5.16%. This rates very favorably against the industrial sector’s average yield of 2.36%. As well, the company features a low payout ratio of 12.08%. Finally, Wall Street rates DAC as a hold. Still, the price target implies an upside potential of nearly 12%.

Global Ship Lease (GSL)

Rounding off this list of the most undervalued dividend stocks to buy is yet another shipping firm, Global Ship Lease (NYSE:GSL). Per its website, Global Ship commands a fleet of 65 container ships of various sizes. At the present juncture, the market prices GSL at 2.34 times trailing earnings. For comparison, the sector median stands at 12.6 times.

Regarding the discount to earnings, Global Ship ranks better than over 91% of its peers. Further, GSL trades at 0.71-times book value, comparing favorably to the sector median of 1.32 times. For risk-takers (particularly those that believe in an economic rebound), GSL could make for an enticing play among the most undervalued dividend stocks to buy.

Currently, Global Ship offers a forward yield of 8.34%. Again, this beats out the industrial sector’s average yield of 2.36% by a hefty margin. Also, the payout ratio of 13.32% is very manageable, at least on paper. Perhaps most notably, Wall Street analysts rate GSL as a consensus strong buy. Their average price target also implies an upside growth potential of nearly 82%.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.