Backtested Strategy: 7 High-Yield Utility Stocks Undervalued by the Graham Number

This is our third time writing about high-yield utilities undervalued by the Graham number - we also wrote about this screen on May 13 and April 8, 2011. On May 13, the screen produced 8 companies. Since then, 6 out of 8 companies mentioned in that article have outperformed the S&P 500 index (a success rate of 75%). The screen averaged a price-weighted rate of return of 1.9% vs. an index return of -3.14%. Click here to access a full breakdown of the screen's past performance. Many investors buy utilities stocks for their dividends or generally low volatility relative to the market. Here we present an interesting list of high-dividend utilities that are currently undervalued based on the Graham equation. Benjamin Graham, the man who developed the equation for the Graham number, was a former mentor of Warren Buffett and is the so-called “Godfather” of value investing. The Graham Number,... Read more