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 | JPM | $353.57 | $264.35 | -25.2% | 23.35 | 133.01 | Fair |
| 102 | FDX | $314.17 | $234.53 | -25.3% | 18.54 | 131.86 | Fair |
| 103 | MET | $95.52 | $71.09 | -25.6% | 5.22 | 43.03 | Fair |
| 104 | AEE | $106.76 | $79.42 | -25.6% | 5.67 | 49.45 | Fair |
| 105 | RJF | $176.63 | $130.55 | -26.1% | 11.46 | 66.10 | Fair |
| 106 | XEL | $76.83 | $56.25 | -26.8% | 3.65 | 38.53 | Fair |
| 107 | GEHC | $66.79 | $48.71 | -27.1% | 4.34 | 24.30 | Fair |
| 108 | SRE | $85.48 | $62.30 | -27.1% | 3.45 | 50.00 | Fair |
| 109 | KIM | $23.75 | $17.22 | -27.5% | 0.86 | 15.32 | Fair |
| 110 | NTRS | $184.89 | $133.91 | -27.6% | 11.65 | 68.41 | Fair |
| 111 | BABA | $112.67 | $81.51 | -27.6% | 4.42 | 66.81 | Fair |
| 112 | GPN | $89.45 | $64.25 | -28.2% | 2.11 | 86.94 | Fair |
| 113 | CVX | $209.98 | $150.43 | -28.4% | 10.39 | 96.80 | Fair |
| 114 | COP | $135.04 | $96.19 | -28.8% | 7.56 | 54.40 | Fair |
| 115 | TTD | $14.04 | $9.92 | -29.3% | 0.84 | 5.21 | Fair |
| 116 | OKE | $97.52 | $68.85 | -29.4% | 5.79 | 36.39 | Fair |
| 117 | PPG | $109.74 | $77.18 | -29.7% | 6.97 | 37.98 | Fair |
| 118 | GS | $1036.34 | $726.60 | -29.9% | 64.81 | 362.05 | Fair |
| 119 | AEP | $125.41 | $87.39 | -30.3% | 5.76 | 58.93 | Expensive |
| 120 | KMI | $31.98 | $22.27 | -30.4% | 1.55 | 14.22 | Expensive |
| 121 | GM | $85.81 | $59.69 | -30.4% | 2.24 | 70.70 | Expensive |
| 122 | CMS | $68.79 | $47.77 | -30.6% | 3.33 | 30.45 | Expensive |
| 123 | NI | $41.91 | $29.06 | -30.7% | 1.88 | 19.97 | Expensive |
| 124 | BSX | $44.98 | $30.95 | -31.2% | 2.47 | 17.23 | Expensive |
| 125 | INVH | $28.23 | $19.39 | -31.3% | 1.09 | 15.33 | Expensive |
| 126 | D | $66.22 | $45.43 | -31.4% | 2.89 | 31.74 | Expensive |
| 127 | PSX | $259.23 | $176.42 | -31.9% | 17.52 | 78.96 | Expensive |
| 128 | ACN | $179.04 | $121.22 | -32.3% | 12.53 | 52.12 | Expensive |
| 129 | BALL | $61.02 | $41.29 | -32.3% | 3.49 | 21.71 | Expensive |
| 130 | DG | $127.86 | $85.41 | -33.2% | 7.70 | 42.10 | Expensive |
| 131 | HRL | $21.23 | $14.10 | -33.6% | 0.62 | 14.25 | Expensive |
| 132 | DTE | $137.28 | $91.04 | -33.7% | 6.31 | 58.38 | Expensive |
| 133 | LNT | $68.64 | $45.44 | -33.8% | 3.16 | 29.04 | Expensive |
| 134 | REGN | $810.30 | $535.98 | -33.9% | 40.39 | 316.11 | Expensive |
| 135 | FE | $46.47 | $30.67 | -34.0% | 1.87 | 22.35 | Expensive |
| 136 | BNY | $162.83 | $106.50 | -34.6% | 8.57 | 58.82 | Expensive |
| 137 | XOM | $160.71 | $105.01 | -34.7% | 7.77 | 63.08 | Expensive |
| 138 | BF-B | $26.73 | $17.37 | -35.0% | 1.55 | 8.65 | Expensive |
| 139 | REG | $75.92 | $49.32 | -35.0% | 2.97 | 36.40 | Expensive |
| 140 | HAL | $36.81 | $23.82 | -35.3% | 1.91 | 13.20 | Expensive |
| 141 | NUE | $256.45 | $165.75 | -35.4% | 12.53 | 97.45 | Expensive |
| 142 | CNP | $40.13 | $25.93 | -35.4% | 1.68 | 17.79 | Expensive |
| 143 | AVB | $184.06 | $117.97 | -35.9% | 7.29 | 84.85 | Expensive |
| 144 | PTC | $133.36 | $85.26 | -36.1% | 10.31 | 31.34 | Expensive |
| 145 | MDT | $92.93 | $59.41 | -36.1% | 4.06 | 38.64 | Expensive |
| 146 | NWSA | $29.84 | $19.07 | -36.1% | 1.03 | 15.69 | Expensive |
| 147 | SO | $89.00 | $56.67 | -36.3% | 4.15 | 34.40 | Expensive |
| 148 | MS | $216.31 | $137.48 | -36.4% | 12.39 | 67.80 | Expensive |
| 149 | FANG | $199.65 | $126.44 | -36.7% | 5.26 | 135.08 | Expensive |
| 150 | GRAB | $3.24 | $2.03 | -37.5% | 0.11 | 1.66 | Expensive |