Contrarian investors should utilize times like this to differentiate between stocks that are dropping for fundamentally sound reasons -- and those stocks that are simply being dragged down because of general market concerns. Sure, there's plenty to worry about -- gigantic federal deficits, sovereign debt problems in Europe, an economic slowdown in China. But let's not forget that in the midst of all of this volatility lies the prospect to grab some great companies at dirt-cheap prices.

In particular, I'm a huge fan of dividend stocks. Renowned Professor Jeremy Siegel has illustrated that from 1957 to 2003, when reinvesting dividends, the S&P's 100 highest-yielding stocks outperformed the market by an average of 3 percentage points. Over a long period of time, 3 percentage points can really add up. So if you can find dividend stocks trading cheaply, and can separate the good from the bad, you may have found yourself a real winner.

In this regular series, I run a screen for three- to five-star dividend stocks (yields above 1%) that have gotten crushed in the past 13 weeks, in addition to companies that are trading at low P/Es. Below is a selection of utility stocks that I like, additionally rated by our own 165,000-strong CAPS community. They are listed in order by the lowest P/E multiples:

Company

Dividend Yield

P/E Multiple

13-Week Price Change

CAPS Rating

Constellation Energy (NYSE: CEG)

2.8%

1.3

(11.6%)

*****

Energen Corp. (NYSE: EGN)

1.2%

11.1

(1.3%)

****

Veolia Environment (NYSE: VE)

4.2%

13.1

(1.6%)

*****

National Fuel Gas (NYSE: NFG)

2.8%

16.6

(4.2%)

****

Source: Motley Fool CAPS. Price change as of June 4.

If you're concerned about bond yields and the future of their returns, now is a great time to check out dividend-paying stocks, especially ones that you can buy at a reasonable price. Not only will they provide you with income to help out with current expenses, but they also have potential for capital appreciation, something that any long-term investor should always be seeking.

This definitely isn't a list of automatic buy recommendations; however, it is a great place to start doing your own due diligence if you're interested in some great-looking, cheap utility stocks.

Have a different opinion? Sound off in the comments below or head over to the CAPS page and let us know what you think!

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Jordan DiPietro owns no shares above. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.