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
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
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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