The S&P Index has gained an impressive 11% so far this year. This makes bargain-priced stocks that also have safe, high dividends a bit more challenging to find. But if you do your homework, then even during a market rally you can find undervalued stocks that may pay handsome returns in the future.

A great place to look for bargain-priced stocks is in out-of-favor industries like oil production or newspaper publishing. Oil stocks are currently out of favor because of a 16% decline in oil prices since March. The stock market may be punishing oil stocks right now, but the long-term outlook for the oil sector remains positive, with oil prices forecast to rise to $117 a barrel within three years from $92 a barrel currently. 

In the case of newspaper publishing, the downtrend is nothing new. The explosive growth of the digital media has been devastating for the old-school publishing industry in general.

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Here are three beaten-down stocks selected from out-of-favor industries that nevertheless continue to offer rich yields and secure dividends:

1. ConocoPhillips (NYSE: COP)
Yield 5%  
In the beaten-down oil stock sector, ConocoPhillips looks particularly enticing. The company completed the spin-off of its Phillips 66 (NYSE: PSX) refining and marketing business in May, and is now positioned as the world’s largest independent exploration and production company, in terms of proved reserves and energy production. ConocoPhillips owns assets in well-known, low-risk energy plays such as Eagle Ford, Bakken and the Permian Basin.

ConocoPhillips posted earnings of $1.5 billion, or $1.22 per share, in the second quarter of 2012, its first quarter as a stand-alone business. Earnings per share beat analyst estimates of $1.17. The company also produced $3 billion of cash flow, more than enough to cover the $0.8 billion quarterly dividend payment. In addition, it funded a $4 billion capital program and made $3.1 billion worth of share repurchases during the quarter.

ConocoPhillips pays a $2.64 annual dividend that yields 4.7%. Going forward, the company plans to grow production 3-5% a year, while returning 25% of its cash flow to investors and maintaining an “A” credit rating. Despite these strengths, ConocoPhillips shares trade at a price-to-earnings (P/E) ratio of 7, which is well below an average P/E of 11 for oil industry peers. If promised production gains and share buybacks are made, then earnings per share growth could exceed 15%. In the meantime, investors collect 5% returns while they wait.

2. Gannet Co. (NYSE: GCI)
Yield: 5%
Despite reporting stronger-than-expected earnings last quarter, international media giant Gannet remains cheaply priced because of its out-of-favor newspaper publishing business. There’s little doubt that newspaper publishing is declining; revenue for this industry is down more than 30% in the past five years. But strong competitors such as Gannet are making investments to diversify their business mix and increase sales in faster-growing digital media areas.

Gannet is best-known for publishing USA Today, the country’s largest-selling daily print newspaper. But the company also operates several unique websites including CareerBuilder.com, the nation’s top employment website. Gannet also owns TV broadcast affiliates that reach more than 20 million viewers across 19 markets.

In the second quarter of 2012, Gannet still earned $0.56 a share on revenue of $1.3 billion, better than the $0.53 per share consensus analyst estimate. Broadcast revenue has been a bright spot, up 11% year-over-year. Companywide digital revenue increased 13% during the quarter compared with the same quarter a year ago.

In August, Gannet further diversified its business mix by acquiring Facebook ad software and services firm Blinq Media for $92 million. This acquisition should help Gannett, which also owns numerous Web properties, including online ad agency PointRoll, cross-sell social media ads to its clients and drive traffic to its sites.

Gannet began paying a dividend in 1967 and grew payout every year until 2009, when it was forced to cut payments from an annualized rate of $1.60 to just $0.16. Since then, the dividend has grown four-fold to a $0.80 annualized rate yielding 5.3%. Gannet pays out just 33% of earnings as dividends, which leaves ample room for dividend gains. The company appears bargain-priced at a P/E of 9, way below the average P/E of 19 for the industry. 

3. Pitney Bowes (NYSE: PBI)
Yield: 11%
Another stock being hammered because of its association with an out-of-favor industry is Pitney Bowes. In the past, this company was mainly known for postage meters and mailing equipment. One need only look at the dire situation of the U.S. Post Office, which is on track to lose $238 billion in the next decade, to recognize postage meters as an industry in decline. In the past few years, however, Pitney Bowes has been re-inventing itself as a technology giant by investing in businesses that provide software, hardware and services for managing digital communications.  

The company’s earnings per share improved slightly to $0.50 in the second quarter of 2012 from $0.49 a year earlier. Despite slumping revenue, Pitney Bowes remains strongly profitable with net margins of 12.6% that are the highest in the office equipment industry. The company expects an improved second half 2012 performance because of a strategic partnership with Interpublic Group (NYSE: IPG) to provide print management services to ad agencies and clients. 

Dividend payout is conservative at 43%, but Pitney Bowes is a Dividend Aristocrat, based on 25 consecutive years of dividend growth. At current prices, the stock is yielding a phenomenal 10.8%. While Pitney Bowes has traded at a near 20 P/E ratio as recently as 2011, today these shares are dirt cheap at a P/E of 4.

Risks to Consider: Pitney Bowes’ digital services are mainly geared to small businesses and small business creation has been slumping lately. In addition, the company’s international mailing business, which accounts for roughly 13% of revenue, is negatively affected by the economic downturn in Europe.

Action to Take — > My top pick overall is ConocoPhillips. The company has a terrific balance sheet, abundant cash flow and a leadership position in a scarce resource poised for steady price gains as the economy recovers. Gannet is a good pick for rich yield and dividend growth seekers. Pitney Bowes is the most risky of the three companies, but currently available at a bargain price for more risk-tolerant investors.

[Note: If you haven’t already seen it, don’t miss StreetAuthority’s report — “Top 5 Income Stocks for 2012.” These five select investments pay dividend yields of 7.5%… 8.8%… even 11.5%. For more details on these investments, you can visit this link without having to sit through a video presentation.]