Graham Number Calculator 2026: Finding Undervalued Stocks During the Correction

If you've been searching for a "Graham Number calculator 2026," there's a good reason most of what you found was stale. The top results are dominated by posts from 2022 and early 2023 — written when the market looked completely different, before the Iran conflict, before oil hit $110, and before this correction stripped the froth off overvalued equities.

This article is different. It's written in March 2026, for the market we're actually in — and it includes real stock examples calculated with today's numbers.

Let's get into it.

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What Is the Graham Number?

The Graham Number is a valuation metric developed by Benjamin Graham — widely considered the father of value investing and the mentor of Warren Buffett. It calculates the maximum price a value investor should pay for a stock based on two fundamental inputs: earnings per share (EPS) and book value per share (BVPS).

The formula is straightforward:

Graham Number = √(22.5 × EPS × BVPS)

The constant 22.5 comes from Graham's belief that a stock should trade at no more than 15× earnings and 1.5× book value. Multiply those caps together: 15 × 1.5 = 22.5.

If a stock's current price is below its Graham Number, it may be undervalued. If it's trading well above its Graham Number, proceed with caution.

Graham designed this as a conservative floor — not a price target. A stock below its Graham Number isn't automatically a buy, but it's a starting point for deeper analysis. Combined with other quality metrics (dividend history, debt levels, earnings consistency), it becomes a powerful filter.

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Why the Graham Number Matters More in 2026

Here's the honest truth about most of the content you'll find on Graham Number calculators: it was written when the S&P 500 was 20–30% higher than it is today, when rate expectations were different, and when geopolitical risk was a background worry rather than a front-page headline.

The world changed. The Iran conflict escalating in early 2026 sent oil prices surging past $110 per barrel, triggering inflationary pressure, equity market selloffs, and a flight to safety that punished growth stocks disproportionately. The market is in a genuine correction — not a crash, but a meaningful repricing of risk.

That's actually good news for value investors.

Corrections compress valuations across the board. Quality companies that were fairly priced or slightly overvalued six months ago are now sitting at genuine discounts to intrinsic value. The Graham Number is one of the best tools for identifying which of those discounts are real versus illusory.

The investors who built generational wealth — Buffett, Munger, Schloss, Tweedy Browne — built it by buying during corrections. Not by waiting for the all-clear signal that never comes. The time to use a Graham Number calculator is now, not when markets have recovered.

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How to Calculate the Graham Number: Step by Step

You need two numbers for any stock:

1. Earnings Per Share (EPS) — Use trailing twelve months (TTM) EPS. Avoid using negative EPS stocks with this formula — it breaks the math and the logic.
2. Book Value Per Share (BVPS) — Total stockholders' equity divided by shares outstanding. This is on the balance sheet of every 10-K.

Then:

• Multiply EPS × BVPS
• Multiply that result by 22.5
• Take the square root

Example (generic):

• EPS: $5.00
• BVPS: $30.00
• Graham Number = √(22.5 × 5.00 × 30.00) = √(3,375) = $58.09

If the stock is trading below $58.09, it passes Graham's first filter.

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4 Real Stock Examples: Graham Numbers Calculated for 2026

Let's run this on four real companies that are relevant in the current market environment. These represent sectors that have been repriced in the correction and are drawing value investor attention.

Note: EPS and book value figures below are based on publicly available trailing twelve-month data as of early 2026. Always verify with the latest filings before making investment decisions.

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1. Chevron (CVX)

Why it's relevant: Oil at $110 is a tailwind for energy majors. CVX has been a value investor favorite for years due to its decades-long streak of dividend increases and strong balance sheet bolstered by the Hess acquisition.

• TTM EPS: ~$9.24 (3-year average smoothing commodity volatility)
• BVPS: ~$100.46
• Graham Number: √(22.5 × 9.24 × 100.46) = √(20,885.63) = ~$144.51
• Recent trading price: ~$205–215 range (well above Graham Number after oil-driven rally)

Takeaway: CVX is trading at a significant premium (~46%) to its Graham Number, reflecting the market pricing in sustained high oil prices from the Iran conflict. The balance sheet is strong (over $100 book value per share after the Hess acquisition), but at current prices, a strict Graham analysis says you're paying for momentum rather than value. The dividend yield (~3.5%) provides income, but patient investors may want to wait for a pullback.

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2. Johnson & Johnson (JNJ)

Why it's relevant: Healthcare is a classic defensive play during corrections and geopolitical stress. JNJ has one of the cleanest balance sheets in the S&P 500 and a 62-year streak of dividend increases.

• TTM EPS: ~$9.80
• BVPS: ~$26.00
• Graham Number: √(22.5 × 9.80 × 26.00) = √(5,733.00) = ~$75.72
• Recent trading price: ~$155–160 range

Takeaway: JNJ trades significantly above its Graham Number, which is typical for highly-rated defensive stocks with consistent earnings power. Graham's formula can undervalue companies with durable competitive advantages and predictable earnings. JNJ is a quality stock — but Graham's formula tells you to be disciplined on entry price. At current levels, the margin of safety is thin.

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3. Verizon Communications (VZ)

Why it's relevant: Telecom is another traditional defensive sector, and VZ has been beaten up over the past two years due to rising debt concerns and competition. That selloff has pushed its valuation into genuinely interesting territory.

• TTM EPS: ~$3.20
• BVPS: ~$22.50
• Graham Number: √(22.5 × 3.20 × 22.50) = √(1,620.00) = ~$40.25
• Recent trading price: ~$38–42 range

Takeaway: VZ is trading right at its Graham Number — a relatively rare situation for a large-cap company. The ~6.8% dividend yield provides meaningful income. The risk here is debt load and whether earnings hold up. But from a pure Graham Number standpoint, this is one of the more interesting value setups in large-cap telecom right now.

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4. Pfizer (PFE)

Why it's relevant: Pfizer is one of the most discussed value names of 2025–2026. After its COVID revenue cliff, the stock sold off dramatically and has stayed depressed. The question is whether it's a value trap or a genuine turnaround play.

• TTM EPS: ~$2.10 (recovering from prior-year losses)
• BVPS: ~$15.50
• Graham Number: √(22.5 × 2.10 × 15.50) = √(732.375) = ~$27.06
• Recent trading price: ~$24–27 range

Takeaway: PFE is trading at or slightly below its Graham Number, with a dividend yield above 7%. The warning flag: earnings are still recovering and the EPS figure is volatile. Graham's formula rewards consistent earners — PFE's recent earnings history has been anything but. Worth watching closely, but apply extra scrutiny before buying. Use it as a starting screen, not a final answer.

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What the Graham Number Tells You (And What It Doesn't)

The Graham Number is a filter, not a verdict. Here's how to use it correctly:

The Graham Number IS good for:

• Quickly screening out obviously overvalued stocks
• Identifying candidates for deeper research during corrections
• Establishing a rough "margin of safety" baseline
• Comparing relative value within a sector

The Graham Number IS NOT good for:

• Valuing growth stocks with high P/E but compounding earnings power
• Companies with negative book value or EPS
• Sector-specific nuances (banks and insurance companies have different book value dynamics)
• Final investment decisions on its own

Graham himself acknowledged that the formula works best with mature, stable businesses — not high-growth tech or biotech. For the latter, other frameworks (DCF, PEG ratio, price-to-sales) are more appropriate.

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The 2026 Opportunity: Why Corrections Create Value Windows

Let's be direct about what's happening in markets right now.

The combination of the Iran conflict, $110 oil, and tightening financial conditions has created a risk-off environment that's compressed valuations across entire sectors — regardless of individual company fundamentals. That means quality companies are being sold alongside weaker ones.

This is the environment Benjamin Graham wrote about in The Intelligent Investor. This is when his framework — built specifically for buying the business rather than trading the market — generates its best results. Not in the bull market euphoria when everything looks undervalued "if you squint right," but in the moments of genuine fear when prices are marked down.

The investors who will look back on 2026 as a formative year for their portfolios are the ones who stayed disciplined, calculated value rather than followed momentum, and bought quality companies at rational prices.

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Also Free: The 15-Point Stock Screener Checklist

The Graham Number is one filter. But a complete stock evaluation uses 15+ criteria — payout ratio, FCF coverage, debt load, earnings consistency, and more.

We put all of them into a free downloadable checklist that walks you through every stock evaluation in about 10 minutes. Value investors keep it open while they research.

→ Download the Free Stock Screener Checklist at gumroad.com/stockwise6

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Run Your Own Graham Number Calculations — Free

You don't need a spreadsheet. You don't need a financial model. You need the right tool.

ValueOfStock.com/calculator lets you run Graham Number calculations on any publicly-traded stock in seconds — enter the ticker, see the Graham Number, compare it to the current price, and get a clear margin-of-safety read.

It's free to use for basic calculations.

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Go Deeper With ValueOfStock.com Pro

The free calculator is a starting point. ValueOfStock.com Pro gives you:

• Full Graham Number screen across the entire market — find every stock currently trading below its Graham Number, filtered by sector, market cap, dividend yield, and more
• Historical Graham Number trends — see how a stock's valuation has evolved over time
• Quality scoring — debt-to-equity, earnings consistency, dividend track record layered onto Graham analysis
• Correction watch list — our curated list of quality companies whose Graham Number discount has widened most during the current market downturn
• Weekly value alerts — get notified when stocks on your watch list cross below their Graham Number

All of this for $9/month.

In a market where a single well-timed purchase of an undervalued quality stock can return 20–40% as conditions normalize, $9 a month is table stakes.

→ Start your Pro trial at valueofstock.com

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The Bottom Line

The Graham Number is a 70-year-old formula that still works — not despite the current market environment, but because of it. Corrections are where value investing proves its worth.

Use the formula. Run the numbers. Find the companies trading below intrinsic value. Do the additional research to confirm quality. Then act with conviction.

The 2026 correction is creating a window. Graham Number analysis is how you see clearly through it.

→ Run your first calculation now: valueofstock.com/calculator

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Harper Banks covers value investing and portfolio strategy at ValueOfStock.com. Nothing in this article constitutes financial advice. All calculations are estimates based on publicly available data and should be verified before making investment decisions. Always conduct your own due diligence.