A simple Graham checklist

Extracted from https://www.fool.com/investing/general/2009/11/27/the-redacted-ben-graham.aspx

  1. An earnings-to-price yield of twice the triple-A bond. (If the triple-A bond is yielding 5.5%, the required earnings yield is 11%, or a price/earnings multiple of 9.1 or less.)
  2. A P/E ratio down to four-tenths of the highest average P/E ratio the stock attained in the most recent five years.
  3. A dividend yield of two-thirds the triple-A bond yield (or 3.67% today).
  4. A stock price down to two-thirds of tangible book value per share.
  5. A stock price down to two-thirds of net current asset value. (Current assets less total liabilities.)
  6. Total debt less than tangible book value.
  7. Current ratio (current assets divided by current liabilities) of two or more.
  8. Total debt equal or less than twice the net quick liquidation value as defined in rule five.
  9. Earnings growth of 7% compounded over the past 10 years (or a doubling of earnings over the past 10 years).
  10. No more than two years of declining earnings of 5% or more over the past 10 years.

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