Fair Value and the Graham Number

It's probably too early for all the predictions I've been reading about Bank of Canada's holding interest rates as is and they have peaked. Expected to slowly come down in 2024. That and the US interest rate holding for now as well has put a spark into the Markets with an upswing lately. 

I've been paying more attention to a stock's "Fair Value" and the "Graham Number". I find it makes sense to buy when a stock is undervalued with growth potential than overvalued where it's price "could" drop after buying while investor sentiment has boosted the price beyond what a company is "worth". 

One can Google the Graham Number and I'll probably add more info on that with the stocks I hold or plan to that are in my Watchlist. However, I call it an investing measuring stick when researching a stock or stay updated on it's value while other investors use different metrics or guidelines.

That approach is probably called defensive investing while attempting to minimise risk, with risk always being a part of investing. 

When a stock is overvalued, it may have future potential and post company forecasts in the news about their plans but things can go south in a hurry at times. Different than Tech stocks like Apple and Microsoft, where those two companies always have something new to build on like AI for example while leading the way in the S&P 500 these days.

Below are some of the Canadian stocks that have performed well in the last year and their dividends, which I snipped from the Globe and Mail about a week ago, Today being the 19th of November, 2023.

I own shares in all but CNQ-T which has become very popular lately, hiking it's dividend by 11%. It's the more expensive stock in the list but it's financial data is decent. The boring but defensive investor stocks some call them which I have onboard for the long haul. 

• Canadian Natural Resources Ltd. (
  CNQ-T +1.48%increase
  ): Dividend yield of 4.4 per cent, five-year dividend growth of 23 per cent and a one-year return to early November of 7.6 per cent.
• Manulife Financial Corp. (
  MFC-T +0.47%increase
  ): A 5.75-per-cent dividend yield, five-year dividend growth of close to 10 per cent and a one-year return of 12.3 per cent.
• Sun Life Financial Inc. (
  SLF-T +0.35%increase
  ): A 4.6-per-cent dividend yield, five-year dividend growth of 9.6 per cent and a one-year return of 8.6 per cent.
• Power Corp. of Canada (
  POW-T +0.41%increase
  ): A 6-per-cent dividend yield, five-year dividend growth of 7 per cent and a one-year return of 4.4 per cent.
• Fortis Inc. (FTS-T): A 4.2-per-cent dividend yield, five-year dividend growth of close to 6 per cent and a one-year return of  7.2 per cent.