How To Use A Stock Screener To Find The Best Stocks

With more than 100,000 stocks across 135 countries, how can you cut through the noise to find the best choices that match your personal investing approach, without spending more time than you have to spare?

That’s exactly where Investing.com’s new free Stock Screener comes in, covering over 99% of the world market cap and helping investors to find the best of both local and global opportunities.

By connecting you to the most reliable data sources (typically reserved for investment firms), and pairing them with a user-friendly interface so you can quickly filter through 167 customized metrics — it’s a stock-picking experience with a turbo-boost.

For example, maybe you only want to invest in stocks with high dividend yields, or stocks in a specific sector, or stocks with a specific Return on Equity (ROE) threshold.

Knowing which filters to apply can make the difference between an average 7% annual return with the S&P 500, versus a much higher potential annual return – as you’ll soon see in the examples below.

For some retail investors, selecting screener filters may be time consuming or overwhelming. Mostly because it takes time to understand what each screener filter stands for and which numbers may constitute a ‘good’ or ‘bad’ opportunity.

If that sounds like you, our predefined screens with selected filters that copy a variety of notable investment strategies can save both time and anxiety. 

Below are three examples of our top predefined stock comparison screeners, and why we’ve created them for investors.

Stanford professor Joseph Piotroski pioneered a groundbreaking approach to estimate corporate financial strength. His methodology assessed firms across metrics related to liquidity, profitability, and operational efficiency known as an “F-Score”, yielding a remarkable average of 23% annualized return over the two-decade span from 1976 to 1996.

To put this in perspective, if you had invested $10,000 twenty years ago, that amount would have returned $628,206.22. We’ve created a specialised Piotroski’s Picks predefined screen based on the Piotroski method.

This predefined screen is configured to locate undervalued stocks offering high shareholder yields through dividends and buybacks.

One of the most interesting filters in this Shareholder Yield Superstars screen is Buyback Yield, a ratio that measures the difference between the amount of share repurchases and the amount of share issuances over the trailing twelve months divided by the company’s market capitalization.

We find that buyback announcements precede excess returns. As an example, stocks on average outperformed the equally-weighted Russell 3000 by 0.60% over one month, and by 1.38% over one year periods, following buyback announcements.

Investors often seek blue-chip stocks because they are well-established companies with a history of stable earnings and dividends.

The Blue-Chip Bargains screen helps investors identify these stocks when they are trading at a discounted price, potentially offering a good value for long-term investment.

Taking return on (common) equity (ROE) into consideration helps this screener to stress the importance of efficiency when it comes to financial stability. It’s important to understand that a good stock screener can help investors to avoid volatile drawdowns as well as highlight exceptional fair price upside potential.

We currently have more than 50+ examples of predefined screens to offer.

Other popular setups include: Analyst Darlings, Talk of the Town, High Beta Bulls, Under $10/Share, Recession Resistant Stocks, and Upcoming Earnings.

For investors who prefer to choose their selection criteria independently, or who want to refine an existing predefined screen, Investing.com’s new and improved Stock Screener offers 160+ different filters. These yield initial results which can be further refined through multiple categories: Dividends, Efficiency, Financials, Growth, Price, Returns, Risk, Technical, Valuation, Insights, and Profile.

There may be instances where data needs to be further manipulated to fit specific investment metrics and processes. Users can export screener data into structured CSV files to create custom models. The screener works as a personal data assistant, providing the raw materials for ongoing investment strategies, whenever they’re needed.

• Market Capitalization: Market capitalization shows how much a company is worth as determined by the total market value of all outstanding shares. You can filter from Large-Cap stocks (> $10B), all the way down to Nano-Cap (< $50M).
• Index Membership: Filter companies based on where they are indexed. For example, filter only companies that are part of the S&P 500, Dow Jones, NASDAQ 100, FTSE 100, IBEX 35, etc.
• Dividend Yield: Base your screen on how much cash companies return to shareholders. Dividend Yield is a favorite metric for income investors.
• Dividends Payment Streak: Find companies based on the uninterrupted length of time that their dividends have been paid out. For example, Exxon (NYSE:XOM) hasn’t missed a dividend payment in 54 years.
• Fair Value Upside: This is the price at which an asset or security should theoretically exchange hands between buyer and seller. Use this filter to determine the true worth of an asset or security and the percentage (higher or lower than the current Fair Value) that the security is currently trading at.
• Next Earnings Date: The biggest market moves usually happen around earnings updates due to the high volume of additional information. Use preset buckets of 1-day, 7-day, etc., to stay up to date about companies that are posting earnings soon.
• Return on Invested Capital: Find companies with a strong track record of creating value for all stakeholders, debt and equity.
• Revenue: Use this criteria to locate companies that generate a solid total income (revenue) from their core operational activities.
• YTD Price Total Return: Find stocks “on the rise” based on the total change in price, adjusted for splits, so far this calendar year.

If you’re looking to compare stocks by getting stuck into our tool, but you’re not sure where to start or how to take action on what you’ve found, we’ve provided some steps on getting started below, complete with visual clues to make sure your stock performance comparison outputs are top-notch and efficiently realized.

Choose a predefined screen or set your own customized filters to filter your way to the cherries that match your initial criteria.

Use one of our 9 different views on the stock results you received to identify those securities with the best potential by analyzing various financial and market indicators. For example:

• Insights: Dive deeper into the company’s valuation, analyst coverage, financial health, and proprietary scores to inform your investment thesis.
• Valuations: Assess the company’s current valuation using a range of metrics, including trailing and forward multiples, yield ratios, and enterprise value calculations.

Other views include: Overview, Returns, Technical, Financials, Growth, Risk or create your own custom view.

Copy your short-listed stocks into a watchlist so you can easily monitor stocks you’re considering. If you’re also an InvestingPro user, you’ll be able to see at a glance which stocks in your bespoke watchlist are overvalued and which are undervalued, saving you even more time when it comes to the moment to invest.

Millions of investors in 35+ countries currently trust Investing.com’s Free Stock Screener for their stock comparison needs, and it’s not difficult to see why.

Investing.com’s upgraded and supercharged Stock Screener is ideal for investors seeking an edge.

Don’t settle for mediocre returns — let the Stock Screener’s robust filters and global data uncover those hidden gems poised for explosive growth.

Whether you’re a savvy veteran or ambitious newcomer, it unlocks professional-grade screening power once reserved for hedge funds.

Visit our new Stocks Screener now.

Perhaps you’re an investor who loves getting stuck into the small details of security data, or you’d rather have as many comparison columns as you need all at once rather than being limited to the 8 most important at any given time.

Or sometimes you just want to use the most powerful stock comparison tool on the market to put it through its paces.

If the above sounds at all intriguing, then you’ll want to check out the InvestingPro Screener, which builds out our free screener to a whole new level.