Graham Number Calculator
Calculate Benjamin Graham's maximum fair price for any stock using the formula √(22.5 × EPS × BVPS). Enter earnings per share and book value per share to find the Graham Number, discount to current price, and the implied P/E × P/B check.
Use normalized EPS for cyclical companies.
Total equity minus preferred equity ÷ shares.
Enter stock price, EPS, and book value per share to calculate the Graham Number.
Sector applicability guide
The Graham Number is most reliable for asset-heavy businesses with stable, positive earnings. It loses accuracy for technology, biotech, and growth companies where intangible assets make up most of the company's value.
| Sector | Applicability | Reason |
|---|---|---|
| Financials (Banks / Insurance) | High | Balance sheet assets are close to market value; BVPS is reliable |
| Utilities | High | Regulated assets + stable earnings; Graham formula works well |
| Industrials | Moderate–High | Tangible assets; EPS cyclicality requires multi-year average |
| Energy | Moderate | Commodity cycles compress EPS; use normalized earnings |
| Materials | Moderate | Capital-intensive; BVPS meaningful, but EPS volatile |
| Consumer Staples | Moderate | Stable earnings; intangible brands not in BVPS |
| Real Estate (REITs) | Low–Moderate | Use NAV and FFO instead of EPS + BVPS for REITs |
| Consumer Discretionary | Low–Moderate | Cyclical earnings and high intangibles reduce reliability |
| Health Care / Biotech | Low | R&D pipeline value not in book; EPS erratic for early-stage firms |
| Communication Services | Low | Subscriber and IP value absent from balance sheet |
| Technology | Low | Intangible-heavy; BVPS often understates true asset base |
Applicability is a general guide, not a strict rule. Always evaluate alongside sector context and multiple valuation methods.
Go deeper: multi-method valuation
The Graham Number is one lens. Pair it with DCF, margin of safety, and book value analysis for a complete picture — especially for defensive value screening.
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Research and educational purposes only. Not investment advice.
Frequently asked questions
Common questions about the Graham Number and Benjamin Graham's value investing criteria.
This tool is for research and educational purposes only. It does not constitute financial advice. The Graham Number is a screening tool developed for defensive investors in a different market era — it does not account for growth, intangible assets, or modern business models. Results depend entirely on user-provided inputs; verify EPS and BVPS from the company's financial statements. Equity Rank is not a registered investment adviser. Consult a qualified financial professional before making investment decisions.