An oversold corner of the market is set for a rebound and will also reward investors with income, according to BMO Capital Markets. Dividend stocks have come under pressure in today’s higher interest rate environment as investors have turned to bonds with juicy yields. Yet, there are certain names within the group where “indiscriminate selling” has gone too far, the investment bank said. These so-called “yield at a reasonable price,” or YARP, stocks are not only undervalued, but they also have dividend growth greater than the market, Brian Belski, BMO’s chief investment strategist, said in a note last week. “We believe these stocks have been unfairly punished in response to perceptions regarding interest rate trends,” Belski wrote. The stocks’ yield levels are also supported by earnings and cash flow, he noted. Further, these YARP stocks saw an annualized gain of more than 80% and outperformed the S & P 500 by 5.7%, on average, from their trough to peak relative performance, he noted. “Thus, if historical patterns are any sort of guide, it could be an opportune time for investors to consider adding exposure to these sorts of stocks within portfolios,” Belski added. Here are some of the YARP names in the S & P 500 that he thinks will outperform. They all have a next-twelve-months price-to-earnings ratio lower than the index and a dividend yield higher than the index. They also have a dividends-per-share growth rate greater than the market over the next two years and strong earnings going forward. Among the utilities on the list is American Electric Power . It has a 4.3% dividend yield and has gained about 1% year to date. The company is set to report quarterly earnings before the bell next Tuesday. Earlier this month, American Electric Power reached an agreement with Icahn Capital to appoint two new directors to its board, including Icahn Capital senior managing director Hunter C. Gary. Another utility play, Exelon , has a 4% dividend yield and is also up less than 1% so far this year. Shares moved higher Wednesday after the company posted an earnings and revenue beat before the bell. Exelon also boosted its quarterly dividend to 38 cents per share, a 5.6% increase from its 2023 fourth-quarter dividend of 36 cents per share. Biopharmaceutical company Gilead Sciences also made the list. Last week, the company announced a $4.3 billion deal to buy drug developer CymaBay Therapeutics to gain access to its experimental liver disease treatment. Gilead reported fourth-quarter adjusted earnings per share that missed expectations earlier this month, while revenue was in line with estimates. The stock currently yields 4.2% and is down 10% year to date. Gilead also said it would hike its cash dividend by 2.7% to 77 cents per share from 75 cents per share, payable on March 28. Lastly, investment banking giant Morgan Stanley has slipped nearly 9% so far this year and has a 4% dividend yield. The company’s fourth-quarter revenue topped expectations , but CEO Ted Pick warned that geopolitical conflicts and the U.S. economy could weigh on the bank this year. — CNBC’s Michael Bloom contributed reporting.