I recently submitted four stocks that met the criteria laid out by Benjamin Graham for defensive investors. I do not believe for a moment that the intent was to find stocks that met the criteria, buy several of them, and then sit tight waiting for the stocks to go up. Do not be duped into thinking that no further homework is required prior to picking a stock from a list such as this.

One response from my previous list, which included Curtiss-Wright (CW), appeared to conclude that the stock might be OK, but that no further research was warranted in his estimation due to the valuation or margin of safety available. That is a very valid argument. Just because a stock corresponds to a predetermined list in every way, it may still not have an adequate margin of safety. The margin of safety may be and probably is different for each investor. Here’s a few more stocks for you to consider:

Ameron International Corp. (AMN)

Sales: $504

Current Ratio: 3.62

LTD: Less than Working Capital

Earnings Stability: 10 years of positive earnings

Dividends: 10 year minimum with a 6.25% yield

Earnings Growth: 5.65% per year (5 years)

P/E: 14.14

P/B: 1.17

P/E x P/B: 16.54

Unifirst Corp. Mass (UNF)

Sales: $1068

Current Ratio: 2.0

LTD: Less than Working Capital

Earnings Stability: 10 years of positive earnings

Dividends: 10 year minimum with a .30% yield

Earnings Growth: 12.92% per year (5 years)

P/E: 13.06

P/B: 1.32

P/E x P/B: 17.24

Cash Pawn America (CSH)

Sales: $1335

Current Ratio: 4.6

LTD: Less than Working Capital

Earnings Stability: 9 years of positive earnings

Dividends: 10 year minimum with a .28% yield

Earnings Growth: 19.92% per year (5 years)

P/E: 12.36

P/B: 1.64

P/E x P/B: 20.27

Universal Corp. (UVV)

Sales: $2458

Current Ratio: 3.1

LTD: Less than Working Capital

Earnings Stability: 10 years of positive earnings

Dividends: 10 year minimum with a 4.91% yield

Earnings Growth: 8.28% per year (5 years)

P/E: 6.92

P/B: 0.92

P/E x P/B: 6.37

Disclosure: Long on CSH

What Worked in the Stock Market for Long-Term Investors?

Extensive research has found that the companies with predictable revenues and earnings outperform the market average; they also suffer lower probability of loss. As a matter of fact, this kind of companies are exactly what Warren Buffett wants to buy and hold forever. Please read the research about what worked in the stock market:

Part I: What worked in the market from 1998-2008? Part I: Predictability Rank
Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

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