What is Empire District Electric Co Graham Number?
Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.
The historical rank and industry rank for Empire District Electric Co's Graham Number or its related term are showing as below:
EDE's Price-to-Graham-Number is not ranked *
in the Utilities - Regulated industry.
Industry Median: 1.15 * Ranked among companies with meaningful Price-to-Graham-Number only.
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Empire District Electric Co Graham Number Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Empire District Electric Co's Graham Number
For the Utilities - Regulated Electric subindustry, Empire District Electric Co's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Empire District Electric Co's Price-to-Graham-Number Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Empire District Electric Co's Price-to-Graham-Number distribution charts can be found below:
* The bar in red indicates where Empire District Electric Co's Price-to-Graham-Number falls into.
Empire District Electric Co Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Empire District Electric Co (NYSE:EDE) Graham Number Explanation
Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:
Current price should not be more than 15 times average earnings of the past three years.
Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)
Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.
In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.
Empire District Electric Co's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Sep. 2016 )
=
34.09
/
23.46
=
1.45
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Please keep these in mind:
1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.
Empire District Electric Co Graham Number Related Terms
Thank you for viewing the detailed overview of Empire District Electric Co's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Empire District Electric Co (Empire District Electric Co) Business Description
Empire District Electric Co is a Kansas corporation organized in 1909. The Company is an operating public utility engaged in the generation, purchase, transmission, distribution and sale of electricity in parts of Missouri, Kansas, Oklahoma and Arkansas. The Company operates its businesses as three segments; Electric, Gas and Other. The Company also provides water service to three towns in Missouri. The Company, along with its subsidiary The Empire District Gas Company, is engaged in the distribution of natural gas in Missouri. The Other segment consists of fiber optics business. As of December 31, 2013 the Company's electric operations serve approximately 168,800 customers and gas operations serve approximately 44,000 customers. The territory served by electric operations embraces an area of about 10,000 square miles, located principally in southwestern Missouri, and also includes smaller areas in southeastern Kansas, northeastern Oklahoma and northwestern Arkansas. The Company supplies electric service at retail to 119 incorporated communities as of December 31, 2013, and to various unincorporated areas and at wholesale to four municipally owned distribution systems. The Company operates under franchises having original terms of twenty years or longer in the incorporated communities. The three largest classes of on-system customers are residential, commercial and industrial. The largest single on-system wholesale customer is the city of Monett, Missouri. The Company currently supplements its on-system generating capacity with purchases of capacity and energy from other sources in order to meet the demands of its customers and the capacity margins applicable under current pooling agreements and National Electric Reliability Council rules. The generating facilities consist of three coal-fired generating plants, two natural gas generating plants and one hydroelectric generating plant. The Company's gas operations serve customers in northwest, north central and west central Missouri. As of December 31, 2013, gas operations served approximately 44,000 customers. The Company provides natural gas distribution to 48 communities and 377 transportation customers as of December 31, 2013. At December 31, 2013 the principal gas utility properties of the Company consisted of approximately 87 miles of transmission mains and approximately 1,160 miles of distribution mains. The three pipelines that serve the Company's gas customers are Southern Star Central Gas Pipeline, Panhandle Eastern Pipe Line Company and ANR Pipeline Company. The Company is subject to the jurisdiction of the Missouri Public Service Commission (MPSC), the State Corporation Commission of the State of Kansas (KCC), the Corporation Commission of Oklahoma (OCC) and the Arkansas Public Service Commission (APSC) with respect to services and facilities, rates and charges, regulatory accounting, valuation of property, depreciation and various other matters.
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