Out of all three of these companies none pass all criteria set forth by Graham; very few companies do. Using a framework to compare and contrast companies is an excellent first step approach and may allow for a more thorough stock selection. Graham’s approach is not for everyone. Due to investor that claim inspiration from Graham, his teachings have laid a sound and time test formula for selecting companies for the long-tern investor.
Out of all three companies The Procter & Gamble Company (NYSE:PG) is best suited as an investment, at these levels. Using a quick valuation we were able to compare and contrast three companies. We were able to see how they fair against a standard as well as each other.
There is nothing that says you have to use Graham’s Rules for the common stock component. It is a solid framework for the defensive investor to start looking at a stock and rather simple. If a stock passes all four criteria, or comes close enough then we dedicate more time to researching the stock to see if there are any red flags. In this case Procter & Gamble moves on to the next round.
Jarrod Jacinth has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble.
The article Comparing 3 Household Names Using Graham’s Rules originally appeared on Fool.com and is written by Jarrod Jacinth.
Jarrod is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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