38 Top Dividend Paying Industrial Stocks With Highest Margin of Safety

Known as the father of value investment, Benjamin Graham was an economist and a professional investor. Warren Buffett states that Graham is the second most influential person in his life after his father. Benjamin Graham is famous for his simple yet powerful estimation rules. In his famous book, Renaissance of Value, Benjamin Graham suggests a rule-of-thumb for estimating the intrinsic value of a company: Value = EPS x (8.5 + 2 x Estimated Earnings Growth) x (4.4 / AAA Corporate Bond Yield) Note that this is a long-term valuation. It does not imply any target price estimate. Moreover, according to this valuation, companies that are currently loss-making are worth zero. However, the formula can still be used to calculate the margin of safety in the long run: Margin of Safety = (Intrinsic Value - Price) / Valuation Graham suggested choosing the undervalued stocks with the highest margin of safety. Warren Buffett explains the margin of safety as paying $70 for a stock with intrinsic value of $100. Graham is a value investor, and he also suggested choosing dividend stocks with positive earnings, strong balance sheets and reasonable P/E ratios. Therefore, I screened for top industrial producers that pay at least some dividends, reported positive earnings, have a P/E ratio lower than 20. All companies are U.S.-based industrials with at least some positive growth in the past, and reasonable (<20%) annual growth estimates. Stock market data is retrieved from Finviz, Google Finance, Yahoo Finance and/or Zacks Investment Research. Corporate bond data is retrieved from Federal Reserve Bank of St. Louis. If you are interested in the energy stocks with highest margin of safety, click here.... Read more