The Intelligent Investor, Rev. Ed by Benjamin; Jason Zweig Graham

Author:Benjamin; Jason Zweig Graham [Graham, Benjamin; Jason Zweig]
Language: eng
Format: mobi
Publisher: Harper Collins, Inc.
Published: 2009-03-17T05:00:00+00:00

All of our suggested criteria were satisfied by the DJIA issues at the end of 1970, but two of them just barely. Here is a survey based on the closing price of 1970 and the relevant figures. (The basic data for each company are shown in Tables 14-1 and 14-2.)

Size is more than ample for each company.

Financial condition is adequate in the aggregate, but not for every company.2

Some dividend has been paid by every company since at least 1940. Five of the dividend records go back to the last century.

The aggregate earnings have been quite stable in the past decade. None of the companies reported a deficit during the prosperous period 1961–69, but Chrysler showed a small deficit in 1970.

The total growth—comparing three-year averages a decade apart—was 77%, or about 6% per year. But five of the firms did not grow by one-third.

The ratio of year-end price to three-year average earnings was 839 to $55.5 or 15 to 1—right at our suggested upper limit.

The ratio of price to net asset value was 839 to 562—also just within our suggested limit of 1½ to 1.

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