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.
As of today (2022-08-09), the stock price of Globe Life is $100.16. Globe Life's graham number for the quarter that ended in Jun. 2022 was $88.62. Therefore, Globe Life's Price to Graham Number ratio for today is 1.13.
The historical rank and industry rank for Globe Life's Graham Number or its related term are showing as below:
GL'
s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.57 Med: 1.03 Max: 1.59
Current: 1.13
During the past 13 years, the highest Price to Graham Number ratio of Globe Life was 1.59. The lowest was 0.57. And the median was 1.03.
GL's Price-to-Graham-Number is ranked worse than 58.16% of 380
companies
in the Insurance industry
Industry Median: 0.81
vs GL: 1.13
Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.
Globe Life Graham Number Historical Data
The historical data trend for Globe Life's Graham Number can be seen below:
* 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.
* Premium members only.
Globe Life Annual Data
Trend
Dec12
Dec13
Dec14
Dec15
Dec16
Dec17
Dec18
Dec19
Dec20
Dec21
Graham Number
118.06
78.46
98.87
110.97
115.39
Globe Life Quarterly Data
Sep17
Dec17
Mar18
Jun18
Sep18
Dec18
Mar19
Jun19
Sep19
Dec19
Mar20
Jun20
Sep20
Dec20
Mar21
Jun21
Sep21
Dec21
Mar22
Jun22
Graham Number
114.73
115.59
115.39
102.21
88.62
Competitive Comparison
For the Insurance - Life subindustry, Globe Life's Graham Number, along with its competitors' market caps and 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.
Globe Life Graham Number Distribution
For the Insurance industry and Financial Services sector, Globe Life's Graham Number distribution charts can be found below:
* The bar in red indicates where Globe Life's Graham Number falls into.
Globe Life Graham Number Calculation
Graham Number is a concept based on Ben Graham's conservative valuation of companies.
Globe Life's Graham Number for the fiscal year that ended in Dec. 2021 is calculated as
* 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.
Globe Life (NYSE:GL) 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.
Globe Life's Price to Graham number Ratio for today is calculated as
Price to Graham number
=
Share Price (Today)
/
Graham number (Q: Jun. 2022 )
=
100.16
/
88.62
=
1.13
* 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.
Globe Life Graham Number Related Terms
Thank you for viewing the detailed overview of Globe Life's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.
Globe Life Inc is an insurance holding company. It provides a variety of life and supplemental health insurance products and annuities to a broad base of customers. The company's core operations are organized into four reportable segments: life insurance, supplemental health insurance, annuities, and investments. Investment activities, conducted by the investment segment, focus on seeking investments with a yield and term appropriate to support the insurance product obligations. These investments generally consist of fixed maturities and, over the long term, the expected yields are considered when setting insurance premium rates and product profitability expectations.
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