Graham Number
EliteDefensive fair-value ceiling — √(22.5 × EPS × book)The Graham Number (Benjamin Graham, The Intelligent Investor) is the square root of 22.5 × trailing EPS × book value per share, a fair-value ceiling for a defensive stock, where 22.5 = Graham's 15× earnings × 1.5× book heuristic. It only exists when both EPS and book value per share are positive, so loss-makers and negative-equity names are dropped. Margin of safety = (Graham Number − price) ÷ price; positive means the stock trades below its Graham Number. Most large caps trade well above, so this is a ranked leaderboard, not a pass/fail gate. Not investment advice.
How it works
Benjamin Graham's ceiling for a defensive investor. He was not trying to find fair value. He was drawing a line above which he would not pay, using two numbers any careful reader could pull from an annual report.
The 22.5 is his two rules multiplied together: no more than fifteen times earnings, and no more than one and a half times book value.
When it misleads
Book value stopped describing most modern companies. A business whose assets are code, brands and people carries almost none of it, so the ceiling comes out absurdly low and nearly everything looks expensive.
It uses a single year of earnings. One bad year drags the ceiling down and makes a sound company look overpriced.
| # | Ticker | Price | Graham № | Margin of safety | EPS | Book/sh | Verdict |
|---|---|---|---|---|---|---|---|
| 101 | AEE | $102.82 | $79.77 | -22.4% | 5.72 | 49.45 | Fair |
| 102 | GS | $945.66 | $731.29 | -22.7% | 65.65 | 362.05 | Fair |
| 103 | FDX | $306.32 | $236.24 | -22.9% | 18.81 | 131.86 | Fair |
| 104 | SRE | $81.19 | $62.48 | -23.0% | 3.47 | 50.00 | Fair |
| 105 | GEHC | $64.06 | $49.10 | -23.4% | 4.41 | 24.30 | Fair |
| 106 | KIM | $22.47 | $17.22 | -23.4% | 0.86 | 15.32 | Fair |
| 107 | JPM | $346.05 | $264.46 | -23.6% | 23.37 | 133.01 | Fair |
| 108 | NTRS | $176.67 | $133.97 | -24.2% | 11.66 | 68.41 | Fair |
| 109 | FOXA | $63.96 | $48.48 | -24.2% | 3.77 | 27.71 | Fair |
| 110 | PGR | $214.59 | $162.50 | -24.3% | 19.86 | 59.09 | Fair |
| 111 | WRB | $69.60 | $52.31 | -24.8% | 4.87 | 24.97 | Fair |
| 112 | GPN | $85.00 | $63.79 | -25.0% | 2.08 | 86.94 | Fair |
| 113 | ADM | $86.28 | $64.66 | -25.1% | 3.80 | 48.91 | Fair |
| 114 | OKE | $92.72 | $69.09 | -25.5% | 5.83 | 36.39 | Fair |
| 115 | PPG | $104.08 | $77.34 | -25.7% | 7.00 | 37.98 | Fair |
| 116 | MET | $96.70 | $71.16 | -26.4% | 5.23 | 43.03 | Fair |
| 117 | AEP | $119.94 | $87.77 | -26.8% | 5.81 | 58.93 | Fair |
| 118 | GRAB | $2.77 | $2.03 | -26.8% | 0.11 | 1.66 | Fair |
| 119 | CMS | $65.45 | $47.84 | -26.9% | 3.34 | 30.45 | Fair |
| 120 | BABA | $112.99 | $82.07 | -27.4% | 4.47 | 66.97 | Fair |
| 121 | COP | $132.74 | $96.38 | -27.4% | 7.59 | 54.40 | Fair |
| 122 | GM | $83.72 | $60.49 | -27.8% | 2.30 | 70.70 | Fair |
| 123 | NI | $40.48 | $29.14 | -28.0% | 1.89 | 19.97 | Fair |
| 124 | D | $63.63 | $45.74 | -28.1% | 2.93 | 31.74 | Fair |
| 125 | TTD | $14.12 | $10.12 | -28.3% | 0.83 | 5.48 | Fair |
| 126 | INVH | $27.07 | $19.39 | -28.4% | 1.09 | 15.33 | Fair |
| 127 | KMI | $31.47 | $22.48 | -28.6% | 1.58 | 14.22 | Fair |
| 128 | CVX | $211.13 | $150.43 | -28.7% | 10.39 | 96.80 | Fair |
| 129 | BSX | $43.47 | $30.82 | -29.1% | 2.45 | 17.23 | Fair |
| 130 | DTE | $128.85 | $91.04 | -29.3% | 6.31 | 58.38 | Fair |
| 131 | HAL | $33.88 | $23.63 | -30.3% | 1.88 | 13.20 | Expensive |
| 132 | BNY | $152.44 | $106.31 | -30.3% | 8.54 | 58.82 | Expensive |
| 133 | DG | $124.13 | $86.07 | -30.7% | 7.82 | 42.10 | Expensive |
| 134 | LNT | $65.94 | $45.65 | -30.8% | 3.19 | 29.04 | Expensive |
| 135 | REGN | $783.11 | $541.39 | -30.9% | 41.21 | 316.11 | Expensive |
| 136 | MS | $201.81 | $137.87 | -31.7% | 12.46 | 67.80 | Expensive |
| 137 | CNP | $38.23 | $26.01 | -32.0% | 1.69 | 17.79 | Expensive |
| 138 | FE | $45.20 | $30.75 | -32.0% | 1.88 | 22.35 | Expensive |
| 139 | BALL | $60.53 | $41.12 | -32.1% | 3.46 | 21.71 | Expensive |
| 140 | WEC | $103.41 | $70.09 | -32.2% | 5.22 | 41.83 | Expensive |
| 141 | REG | $72.66 | $49.23 | -32.2% | 2.96 | 36.40 | Expensive |
| 142 | HRL | $20.84 | $14.10 | -32.4% | 0.62 | 14.25 | Expensive |
| 143 | BF-B | $26.50 | $17.65 | -33.4% | 1.60 | 8.65 | Expensive |
| 144 | BKR | $56.47 | $37.53 | -33.5% | 3.12 | 20.06 | Expensive |
| 145 | DECK | $78.69 | $52.19 | -33.7% | 7.19 | 16.83 | Expensive |
| 146 | NUE | $252.80 | $167.20 | -33.9% | 12.75 | 97.45 | Expensive |
| 147 | SO | $85.93 | $56.81 | -33.9% | 4.17 | 34.40 | Expensive |
| 148 | ACN | $183.91 | $121.36 | -34.0% | 12.56 | 52.12 | Expensive |
| 149 | PSX | $274.09 | $179.57 | -34.5% | 18.15 | 78.96 | Expensive |
| 150 | WY | $21.32 | $13.96 | -34.5% | 0.66 | 13.12 | Expensive |