The best thing about equity markets is that there is no dearth of opportunities. Be it recession, inflation or a pandemic, there are attractive investment themes that deliver robust returns. There are also ample stocks to buy in oversold market conditions. Smart investors pursue hidden gem stocks as one strategy to consistently beat the markets.

Hidden gems are fundamentally strong companies that have been flying under the radar. As a result of lackluster market interest, these hidden gem stocks to buy are undervalued. However, the upside potential is significant once these stocks are on the radar of big investors.

Besides the potential for capital gains, two of the stocks discussed have an attractive dividend yield with dividend growth visibility.

Let’s talk about the reasons that make these stocks attractive.

Aker BP ASA (DETNF)

Oil and gas stocks such as Chevron (NYSE:CVX) and Occidental (NYSE:OXY) have been in the limelight with Warren Buffett buying a stake.

However, there are other hidden gems in the energy sector that are worth buying for the long term. Aker BP ASA (OTCMKTS:DETNF) is one such value creator. The 7.1% dividend yield stock looks poised for a significant rally as production and cash flows swell.

Aker BP ASA is focused on the Norwegian Continental Shelf. The company has low break-even assets, which makes the stock attractive. Aker BP reported revenue and EBITDA of $4.9 and $4.5 billion respectively for Q3 2022. For the same period, the company reported free cash flow of $1.9 billion.

Amdocs Limited (DOX)

Technology stocks have been in a correction mode. However, Amdocs Limited (NASDAQ:DOX) is among the exception with an upside of 22% in the last 12 months.

The stock remains attractive at a forward price-earnings ratio of 15.8 and offers a dividend yield of 1.87%.

As an overview, Amdocs is a provider of software and services to communication and media companies. For fiscal year 2022, the company clocked revenue of $4.58 billion. An important point to note is that 75% of the revenue is recurring and this provides clear cash flow visibility.

For 2022, the company reported free cash flow of $665 million. Amdocs has guided for FCF of $700 million for 2023. With the company investing $1 billion in its next-generation cloud platform, order intake is likely to accelerate. The company currently has a 12-month backlog of $3.97 billion.

As the rollout of 5G accelerates, the business outlook will remain positive. With all key business metrics looking good, DOX stock is likely to remain in an uptrend.

Radware (RDWR)

Radware (NASDAQ:RDWR) is another name among hidden gem stocks to buy.

After some correction, RDWR stock seems to be in a strong consolidation zone. A Breakout on the upside seems imminent as demand for cybersecurity solutions increases globally.

Radware is a provider of cyber security solutions for physical, cloud, and software-defined data centers. The company believes that the addressable market for its solutions is likely to be $13 billion by 2025. This provides ample headroom for growth. In particular, as the market for public and private cloud expands, Radware is positioned to benefit.

For Q2 2022, Radware reported revenue of $70.5 million with 71% recurring revenue. With Radware consistently generating positive operating cash flows, financial flexibility is high. As of Q3 2022, the company reported $434.3 million in cash and equivalents. This is worth mentioning as the company’s growth strategy includes potential acquisitions.

On the date of publication, Faisal Humayun did not hold (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.