NEW YORK ( TheStreet) -- One of my initial columns for TheStreet.com back in May, focused on what names one on my investment heroes and the father of value investing
- Adequate Size: Graham excluded smaller companies; I've set the minimum market cap at $1 billion.
- Strong Financial Condition: Minimum current ratio of 2; long-term debt must be less than working capital.
- Earnings Stability: Graham required positive earnings for at least ten consecutive years: I am using seven years.
- Dividends: Graham required "uninterrupted" dividends for at least 20 years; I am using seven years here as well.
- Earnings Growth: Graham sought a minimum increase of 33% in earnings per share in the past 10 years; I am using a minimum compounded annual growth rate in earnings of 5% over seven years.
- Moderate Price-To-Earnings Ratio: Average P/E should be less than 15 over the past three years.
- Moderate Price-to-Assets Ratio: Graham sought companies with price-to-book ratios below 1.5, but would accept a higher P/E ratio, if price-to-book was lower. This end result was that P/E times price-to-book ratio should be less than 25.5.
- Other: U.S. companies only; I excluded foreign companies and American Depository Receipts from the results.