Updated: April 13, 2016
Benjamin Graham, the father of value investing, liked bargains. In The Intelligent Investor, he told investors to look for stock prices at or below 15-times earnings (specifically less than 15X their three year average), and at or below 1.5-times book value.
And like us, he liked dividends. He’d only buy companies that paid dividends for each of the last 20 years prior.
His stringent formula should still outperform the broader market, and keep you out of trouble today. Problem is, it was outlined in 1949. And 67 years later, it’s challenging to find stocks that meet his stringent criteria because equity valuations have been high for the better part of 30 years now.… Read more