Screen for undervalued utilities with the Graham Number and a web-connected spreadsheet with live financial updates.
Utility companies are a core component of long-term investment planning. They’re stable, pay consistent dividends and sell a product that people will always want.
The Graham Number is a simple method of screening for undervalued stocks. Introduced by Benjamin Graham in his seminal book “The Intelligent Investor”, it’s equal to the square root of (22.5 x EPS x Book value per share). A stock is undervalued if the current market price is lower than its Graham Number
This web-connected spreadsheet has a list of electric utilities traded on the NYSE (and a few others). It downloads the market capitalization, last trade price, PE ratio, book value and EPS.
Some VBA then calculate the Graham Number for each utility. Undervalued utilities are highlighted in green, while those that are overvalued are highlighted in red. If you update the spreadsheet, you get the latest Graham Number.
Here’s a summary of the results, correct as of 21st February 2015.
| Name | Stock Exchange | Market Cap | EPS Estimate | PE Ratio | Book Value | Last Trade | Graham Number |
|---|---|---|---|---|---|---|---|
| Empire District E | NYSE | 1.107B | 1.4 | 16.63 | 18 | 25.48 | 23.81 |
| SPARK INFR FORUS | ASX | 3.182B | 0.15 | 20.85 | 1.25 | 2.17 | 2.05 |
| Cleco Corporation | NYSE | 3.300B | 2.71 | 20.68 | 27.14 | 54.66 | 40.68 |
| Hawaiian Electric | NYSE | 3.416B | 1.7 | 20.34 | 17.47 | 33.31 | 25.85 |
| Pacific Gas & Ele | NYSE | 26.192B | 3.5 | 17.99 | 33.09 | 54.98 | 51.05 |
| Alliant Energy Co | NYSE | 7.168B | 3.46 | 18.41 | 30.97 | 64.61 | 49.1 |
| Calpine Corporati | NYSE | 8.295B | 0.93 | 9.43 | 8.85 | 22.05 | 13.6 |
| Wisconsin Energy | NYSE | 11.710B | 2.72 | 19.87 | 19.60 | 51.93 | 34.63 |
| NRG Yield, Inc. C | NYSE | 1.851B | 1.53 | 65.11 | 38.6 | 53.53 | 36.45 |
| Edison Internatio | NYSE | 20.881B | 4.31 | 14.18 | 32.95 | 64.09 | 56.53 |
| OGE Energy Corpor | NYSE | 6.787B | 1.97 | 17.21 | 16.27 | 34.05 | 26.85 |
| Abengoa Yield plc | NasdaqNM | 2.778B | 0.05 | 22.91 | 34.73 | 5.08 | |
| Great Plains Ener | NYSE | 4.212B | 1.57 | 17.49 | 23.42 | 27.38 | 28.76 |
| Spark Energy, Inc | NasdaqNM | 45.6M | 1 | 2.19 | 3.4 | 15.2 | 8.75 |
| Black Hills Corpo | NYSE | 2.220B | 2.88 | 17.23 | 30.4 | 49.71 | 44.38 |
| Huaneng Power Int | NYSE | 17.286B | 5.29 | 9.30 | 29.88 | 48.29 | 59.64 |
| Vector Limited Or | NZSE | 2.897B | 0.16 | 17.22 | 2.30 | 2.91 | 2.88 |
| Southern Company | NYSE | 41.941B | 2.84 | 20.93 | 22.07 | 46.14 | 37.55 |
| PEPCO Holdings, I | NYSE | 6.862B | 1.22 | 25.79 | 17.32 | 27.24 | 21.8 |
| CMS Energy Corpor | NYSE | 9.801B | 1.88 | 20.38 | 13.34 | 35.58 | 23.75 |
| NextEra Energy, I | NYSE | 46.675B | 5.63 | 18.83 | 45.06 | 105.6 | 75.55 |
| TECO Energy, Inc. | NYSE | 4.648B | 1.11 | 34.38 | 11.07 | 19.99 | 16.63 |
| CAPITAL POWER COR | Toronto | 2.112B | 0.87 | 30.84 | 28.58 | 25.43 | 23.65 |
| Ameren Corporatio | NYSE | 10.426B | 2.36 | 18.15 | 27.92 | 42.97 | 38.51 |
| The AES Corporati | NYSE | 8.478B | 1.27 | 24.13 | 6.14 | 11.89 | 13.25 |
| TrustPower Limite | NZSE | 2.538B | 0.41 | 19.98 | 4.93 | 8.11 | 6.75 |
| ITC Holdings Corp | NYSE | 6.175B | 1.87 | 22.83 | 10.47 | 40 | 20.99 |
| Xcel Energy Inc. | NYSE | 18.164B | 2.09 | 17.87 | 20.09 | 35.92 | 30.74 |
| Consolidated Edis | NYSE | 18.672B | 3.91 | 15.28 | 43.39 | 63.75 | 61.78 |
| FORTIS INC | Toronto | 10.908B | 2.02 | 27.75 | 22.99 | 39.71 | 32.32 |
| ERM POWER FPO | ASX | 515.2M | 0.13 | 1.17 | 2.18 | 1.85 | |
| DTE Energy Compan | NYSE | 14.745B | 4.62 | 16.35 | 47.05 | 83.2 | 69.93 |
| Entergy Corporati | NYSE | 14.214B | 5.41 | 15.28 | 55.85 | 79.32 | 82.45 |
| PP&L Corporation | NYSE | 23.291B | 2.29 | 13.41 | 20.47 | 34.98 | 32.47 |
| TERNA | Milan | 7.923B | 0.26 | 15.4 | 1.46 | 3.94 | 2.93 |
| El Paso Electric | NYSE | 1.529B | 2.27 | 17.35 | 25.17 | 37.89 | 35.86 |
| SCANA Corporation | NYSE | 8.311B | 3.79 | 15.37 | 34.80 | 58.3 | 54.47 |
| Pinnacle West Cap | NYSE | 7.264B | 3.86 | 17.55 | 40.67 | 65.77 | 59.43 |
| Dominion Resource | NYSE | 43.395B | 3.72 | 32.94 | 19.7 | 73.99 | 40.61 |
| Companhia Paranae | NYSE | 3.013B | 1.55 | 7.57 | 17.31 | 11.01 | 24.57 |
| Portland General | NYSE | 2.891B | 2.28 | 17.11 | 24.43 | 36.95 | 35.4 |
| American Electric | NYSE | 28.714B | 3.52 | 17.48 | 34.4 | 58.72 | 52.19 |
| Ormat Technologie | NYSE | 1.451B | 1.43 | 26.33 | 16.95 | 31.86 | 23.35 |
| Empresa Nacional | NYSE | 12.303B | 2.82 | 22.77 | 15.9 | 45 | 31.76 |
| FirstEnergy Corpo | NYSE | 15.085B | 2.67 | 20.31 | 30.19 | 35.85 | 42.59 |
Of course, the Graham Number shouldn’t be used in isolation. Benjamin Graham dictated that a company should meet several criteria before being valued by the Graham Number. These include uninterrupted earnings for the last ten years, a current ratio of over 2, consistent dividends for the last twenty years, and several others.
Get Spreadsheet to Value Electric Utility Stocks with Graham Number
Hi,
When I select the above link to download the file, then open it, there is no excel file inside the zip file. Is this link incorrect ?
My bad. I’ve uploaded a new zip file.