Stock screeners filter thousands of stocks down to a manageable list based on your criteria. They're essential tools for efficiently finding stocks that match your investment strategy.
What Are Stock Screeners?
Definition
Stock Screener:
- Database of stock data
- Filter by criteria
- Generate candidate lists
- Starting point for research
Why Use Screeners
Benefits:
- Efficiency: Filter thousands quickly
- Objectivity: No emotional bias
- Consistency: Same criteria every time
- Discovery: Find stocks you'd miss
Popular Screeners
Free Screeners
Yahoo Finance:
- Good basic screener
- Fundamental and technical
- Easy to use
Finviz:
- Excellent free version
- Many filters
- Visual maps
Google Finance:
- Simple interface
- Basic screening
Broker Screeners
Often Included:
- Fidelity
- Charles Schwab
- TD Ameritrade
- Usually excellent
Premium Screeners
Paid Options:
- Morningstar
- Stock Rover
- Zacks
- More advanced features
Types of Screens
Value Screens
Looking For:
- Low P/E ratio
- Low P/B ratio
- High dividend yield
- Below book value
Example Criteria:
- P/E < 15
- P/B < 1.5
- Dividend yield > 3%
- Positive earnings
Growth Screens
Looking For:
- High revenue growth
- High earnings growth
- Expanding margins
- Strong ROE
Example Criteria:
- Revenue growth > 20%
- EPS growth > 15%
- ROE > 15%
- Market cap > $1B
Quality Screens
Looking For:
- Consistent earnings
- Low debt
- High returns
- Strong cash flow
Example Criteria:
- 5-year earnings growth positive
- Debt/Equity < 0.5
- ROE > 15%
- Operating margin > 15%
Income Screens
Looking For:
- High dividends
- Sustainable payout
- Dividend growth
- Financial strength
Example Criteria:
- Dividend yield > 3%
- Payout ratio < 60%
- 5-year dividend growth > 0%
- Positive cash flow
Momentum Screens
Looking For:
- Strong price performance
- Breaking out
- High relative strength
- Volume confirmation
Example Criteria:
- 52-week high proximity
- Price above 200 MA
- Volume above average
- Positive 3-month return
Common Screening Criteria
Fundamental Filters
Valuation:
- P/E ratio
- P/B ratio
- P/S ratio
- PEG ratio
- EV/EBITDA
Profitability:
- Net margin
- Operating margin
- ROE
- ROA
- ROIC
Growth:
- Revenue growth
- Earnings growth
- Cash flow growth
Financial Health:
- Current ratio
- Debt/Equity
- Interest coverage
Dividends:
- Dividend yield
- Payout ratio
- Dividend growth rate
Technical Filters
Price:
- Above/below moving averages
- Near 52-week high/low
- Price change %
Volume:
- Average volume
- Volume change
- Unusual volume
Momentum:
- RSI levels
- Relative strength
- MACD signals
Descriptive Filters
Company Characteristics:
- Market cap
- Sector
- Industry
- Country/Region
- Exchange
Building Effective Screens
Start Simple
Begin With:
- Few criteria
- Broad parameters
- Too tight = no results
Refine Gradually
Then:
- Add criteria
- Tighten ranges
- Get manageable list
Target 10-50 Results
Sweet Spot:
- Too few: Criteria too tight
- Too many: Need to filter more
- 10-50: Manageable for research
Combine Criteria Logically
Make Sense:
- Don't contradict
- Aligned with strategy
- Meaningful filters
Sample Screens
Warren Buffett Style
Criteria:
- ROE > 15%
- Debt/Equity < 0.5
- 5-year EPS growth > 0%
- P/E < 20
- Market cap > $10B
Dividend Growth
Criteria:
- Dividend yield > 2%
- 5-year dividend growth > 5%
- Payout ratio < 60%
- Positive earnings
- Market cap > $2B
Growth at Reasonable Price
Criteria:
- PEG < 1.5
- Revenue growth > 15%
- P/E < 25
- ROE > 12%
- Market cap > $1B
Turnaround
Criteria:
- P/B < 1
- Current ratio > 1.5
- Positive operating cash flow
- Negative 1-year return
- Insider buying
After Screening
Screen is Just Start
Next Steps:
- Review results list
- Quick scan of companies
- Deeper research on promising
- Full analysis before buying
Avoid Screen-Only Investing
Don't:
- Buy based only on screen
- Skip fundamental research
- Ignore qualitative factors
Screen Regularly
Maintenance:
- Run screens periodically
- Market conditions change
- New opportunities emerge
- Existing picks may screen out
Tips for Success
Save Your Screens
Benefit:
- Consistency
- Time savings
- Track what works
Backtest If Possible
Some Platforms:
- Show historical results
- Test criteria effectiveness
Combine Approaches
Use:
- Multiple screens
- Different strategies
- Diversify methods
Key Takeaways
- Screeners filter stocks by your criteria efficiently
- Free screeners often sufficient for beginners
- Match screen criteria to investment strategy
- Start broad, refine to get 10-50 results
- Screening is first step, not final decision
- Always do deeper research on candidates
- Save and refine screens over time
- Combine quantitative and qualitative analysis
What's Next?
Learn how to analyze small-cap stocks.
This article is for educational purposes only and does not constitute financial advice.
Risk warning. This is education only, not financial, investment, tax or legal advice, and not a recommendation to buy or sell anything. Trading forex, CFDs, stocks, commodities, futures, options and crypto is high-risk; with leverage you can lose more than you deposit, and most retail traders lose money. Before you trade or invest in any form, check the local laws where you are and the rules of your country of residence, and consider your own financial situation; if in doubt, ask a licensed adviser. Past and tested results, and all examples, are for illustration only and do not guarantee future results.