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Stingy Investor Tip Sheet

Graham's Simple Way plus Dividends

I've been following Ben Graham's Simple Way for many years with much success. Indeed, the current issue of MoneySense magazine (October 2008) reveals this year's Simple Way picks. Just look for my article called Simply Spectacular. It seems that my kindly editor, who doubles as my title composer, was very pleased with this year's 22% gain for our Simple Way stocks.

(You can learn all about Ben Graham's Simple Way by heading off to the newsstand and buying this month's MoneySense magazine. Perhaps it's time for a subscription? Alternately, you can read last year's article, for free, by following the link to So simple it works.)

I note that the nice performance figures don't include dividends. That got me thinking. Why not seek Simple Way stocks that also pay dividends? Now that sounds interesting. Today I screened for NYSE-listed dividend payers that pass Graham's low price-to-earnings and low debt tests.

With the market in a funk, lots of stocks pass Graham's tests and I decided to focus everything but insurance companies for two reasons. First, it's good to avoid overly concentrating on one industry and there are a great many insurance companies that pass at the moment. But more importantly, insurance companies write contracts that represent very real obligations which may not be well known in advance. Some may appear to pass Graham's debt test but if they've written a bad contract, their shareholders could be headed for the poorhouse.

These are the Simply Way dividend payers which also sport the lowest price-to-earnings ratios.

Company			         Price	  P/E   Yield
=============================== =======  =====  =====
Navios Maritime (NM)		  $8.17	  2.75	 4.8%
Ingersoll Rand (IR)		 $35.37	  3.11	 2.1%
Corning (GLW)			 $16.21	  4.66	 1.3%
Petro Canada (PCZ)		 $37.71	  5.08	 2.1%
Jones Apparel  (JNY)		 $20.35	  5.34	 2.6%
Carpenter Tech (CRS)		 $32.01	  5.61	 2.4%
Source: yahoo.com, Sept 11, 2008

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09/11/2008   11:55 PM EST   Permlink   save & shareGraham



 
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