By Isabelle Sender, S&P Capital IQ, The Outlook

In our latest stock screen, we looked for dividend-paying stocks with low P/E multiples that also earn a strong "buy" recommendation from our analysts.

For investors who believe U.S. equity valuations are unduly depressed, there are several stocks that carry S&P Capital's top ranking of 5 stars, or "strong buy," that trade significantly below current and historical benchmark valuations and offer attractive yields.

Currently, valuations appear attractive when compared with historical data. As of the S&P 500's Aug. 10 close, the large-cap benchmark was trading at a price-to-earnings multiple 13.6 times S&P Capital IQ equity analysts' earnings-per-share estimates for 2012, while the S&P 1500 Composite's P/E was 14.1.

Historically, the median P/E for the 500’s operating results since 1988 is 17.9 times and 15.7 times for earnings reported under generally accepted accounting principles (GAAP) since 1936.

S&P Capital IQ Chief Equity Strategist Sam Stovall’s interpretation of S&P 500 history and technical indicators suggests the market has a good chance of extending its current rally. He believes the S&P 500 “could rise to between 1450 and 1500+ by the end of 2012.”

The 10 stocks listed below are U.S.-traded companies ranked 5-STARS (our highest, strong buy rating) with a P/E ratio equal to or less than 10, and a dividend yield higher than 2%.

•     Aflac (AFL) -- yielding 2.9 with a p/e of  7.1
•     Barrick Gold (ABX) -- yielding 2.2% with a p/e of 8.2
•     Chevron (CVX)  -- yielding 3.2% with a p/e of 8.3
•     Huntington Bancshares (HBAN) -- yielding 2.7% with a p/e of 8.8
•     Johnson Controls (JCI) -- yielding 2.7% with a p/e of 10
•     Magna International (MGA) -- yielding 2.4% with a p/e of 8.3
•     Microsoft (MSFT) -- yielding 2.6% with a p/e of 9.9
•     Rio Tinto (RIO) -- yielding 3.5% with a p/e of 6.9
•     Travelers (TRV) -- yielding 2.9% with a p/e of 10
•     Valero Energy (VLO) -- yielding  2.4% with a p/e of 7.6

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