François Rochon
Fifteen per cent on equity, earned without leverage, for years at a time.
| Measure | Formula | Median | Middle half | Reporting it | Published threshold | Companies clearing it |
|---|---|---|---|---|---|---|
| Return on equity | Net income ÷ shareholders’ equity | 11.7% | 6.3% – 20.4% | 537 | 15.0% | 200 of 537 |
| Debt to equity | Total debt ÷ shareholders’ equity | 0.79x | 0.39x – 1.45x | 442 | none published | — |
| Positive earnings, ten years running | Needs ten years of filings | — | — | — | — | — |
Where each comes from
| Return on equity | His stated floor, and one of the few published as a number rather than a principle: a business should earn more than 15% on its equity. |
|---|---|
| Debt to equity | The qualifier that does the work — a high return on equity produced by borrowing is not the same fact as one produced by the business. |
| Positive earnings, ten years running | Graham's fourth defensive criterion, and the only one of his that needs a decade: some earnings in every one of the past ten years. A single loss year fails it. |
Source: Giverny Capital annual letters, which restate the criteria each year.
What this cannot tell you
He buys at a discount to his own estimate of intrinsic value, which is a judgement about the future rather than a figure in a filing.
This page describes a published method and applies its measures to filings. It is not a score, not a ranking and not a recommendation, and no page here aggregates these into a verdict. · All 11 metrics