A Practical Guide to Stock Screening

Last reviewed on 2026-04-27.

The screener page on this site is a tool. This page is a method. Most readers who try a screener for the first time fall into the same trap: they tick a few interesting-looking boxes, get a list of unfamiliar names, and then have no way to evaluate the result. The fix is simple but easy to forget — work backwards from a clear question, not forwards from a list of available filters.

Step 1 — Decide what the screen is for

A screen is a filter. It removes everything that doesn't match a definition. So before opening the screener at all, write down — even in a single sentence — what definition matters. Some examples that lead to clear screens:

• "Profitable mid-cap industrials with low debt and a steady dividend."
• "Software businesses growing revenue above 15% per year and already turning a profit."
• "Large-cap stocks trading well below their 52-week high but with rising relative strength in the last month."
• "Banks with a price-to-book below 1.0 and return on equity above 8%."

Each of those sentences maps cleanly to filters. By contrast, "find me good stocks" maps to nothing useful — the screener cannot interpret "good," and any list it produces will reflect whatever defaults the tool picked rather than a deliberate definition.

Step 2 — Bound the universe

The next step is to set the universe the screen will run on. This is unglamorous and almost always omitted. Yet it changes the result more than the value filters ever do. The default universe in the embedded screener is US-listed stocks with the most-capitalised names at the top, which is sensible if a US large-cap screen is the goal and unhelpful if it is not.

Practical decisions to make at this stage:

• Country / market. US, Canada, UK, Europe, Japan, India, etc. Most readers should pick one and stick to it for a single screen.
• Exchange. Major listings only, or include OTC and venture markets. Including the small-cap and OTC tail dramatically expands the universe and the noise in it.
• Sector exclusions. Some sectors are structurally different and skew comparisons. A common move is to exclude financials and utilities from a generic value screen, because their balance sheets and capital structures are not directly comparable to industrials and consumer companies.
• Size floor. A market-cap minimum filters out micro-caps where data quality is patchy and liquidity is thin. A common floor is one billion or larger.

Step 3 — Pick three to five filters, no more

The temptation is to keep adding criteria. Resist it. Each additional filter shrinks the candidate pool multiplicatively. By the seventh filter, the shortlist is usually empty or one strange outlier. Three to five well-chosen filters is the sweet spot.

A robust pattern is to combine one filter from each of three categories: a valuation lens, a quality check, and a sanity filter on size or liquidity. Add one or two more if the question really needs them.

Here is the same idea as a table:

Category	What it does	Examples
Valuation	Asks whether the price is reasonable for what the company produces or owns.	P/E below sector median, P/B below 2, EV/EBITDA below 12, dividend yield above 3%.
Quality / profitability	Asks whether the business actually works.	ROE above 12%, operating margin above 10%, debt-to-equity below 1, positive free cash flow.
Size / liquidity	Filters out the long tail where data is unreliable and trading is thin.	Market cap above 1 billion, average daily volume above 500,000 shares.
Growth (optional)	Adds a forward-looking constraint when relevant.	Revenue growth above 10% over the last three years, earnings growth above zero.
Technicals (optional)	Adds an entry-timing constraint.	Price above 200-day moving average, RSI between 40 and 70, no recent gap down.

Step 4 — A worked example: a quality value screen

Suppose the question is: "US large-cap businesses that look reasonably priced relative to earnings, are clearly profitable, and are not dangerously leveraged."

That sentence translates into the following filters in the embedded screener:

1. Country: United States. Exchange: NYSE and Nasdaq.
2. Market cap: above 10 billion (large cap).
3. Forward P/E: less than 18 (a soft "not expensive" cut).
4. Return on equity: above 12% (a profitability floor).
5. Debt-to-equity: below 1.0 (balance-sheet sanity check).

Five filters. Together they cut the US large-cap universe down to a manageable shortlist — typically a few dozen names depending on the day's market.

Now sort the shortlist. Two useful sorts: by sector (so the reader can see whether the screen is dominated by one industry, which is often a hidden signal that the criteria are too narrow), and by dividend yield or P/E (so the most extreme cases sit at the top for further checking).

Step 5 — Read the shortlist with a sceptical eye

The list is a collection of hypotheses, not a portfolio. For each name on it, click through to the ticker page and answer four quick questions:

• What does the company actually do? The company-profile widget answers this in a sentence. If the business model is opaque, that is a flag.
• Is the metric still true? Screener data refreshes on a schedule; a recent earnings surprise can change the picture before the screener catches up. The fundamentals widget on the ticker page is a fresher cross-check.
• What does the chart look like? A long-term downtrend with a low P/E is often a value trap. A long-term uptrend with a low P/E is much more interesting. The reading charts primer is the relevant background.
• What is the latest news? A sudden reason for the cheap valuation often appears in the news feed: regulatory trouble, an earnings miss, a sector rotation. Worth checking before assuming the screen has found a hidden gem.

Step 6 — Iterate the screen, not the shortlist

If the shortlist is too long, the criteria are too loose; tighten one filter, not five. If the shortlist is empty, one filter is too tight; loosen one, not all. Changing several filters at once makes it impossible to see which constraint mattered.

It also pays to write down the screen — even informally, even just in a note — so it can be re-run a quarter later and the results compared. A screen that produces a different shortlist every time the wind changes is not a screen so much as a mood reading.

Common mistakes

• Ranking by a single metric in isolation. "Highest dividend yield" returns falling stocks. "Lowest P/E" returns broken businesses. Always sort with at least one quality cross-check.
• Mixing universes that should not be compared. A US bank and a Japanese industrial in the same shortlist is rarely an apples-to-apples comparison. Pick a coherent universe up front.
• Confusing filters with thresholds. "P/E below 18" is a filter; "below the sector median P/E" is a relative threshold and almost always more meaningful. Use relative thresholds where the screener supports them.
• Skipping the sanity sort. Sort by sector after running every screen. If 80% of the result is one industry, the screen is implicitly an industry pick, not the screen the reader thought they were running.

Other types of screens worth knowing

Three patterns turn up over and over among practical investors and are worth recognising even if a reader's own preference lies elsewhere.

Quality compounders

Filters: ROE above 15% for the past five years, gross margin above 40%, revenue growth above 5% per year, low or moderate debt. Returns the businesses that compound capital steadily — typically pricier on a P/E basis but defensible on a quality basis. Pair with a long-term chart on each candidate.

Dividend safety

Filters: yield above 3%, payout ratio below 60%, debt-to-equity below 1, no dividend cuts in the last decade. Returns mature, cash-generating businesses where the dividend is part of the investment thesis. The payout-ratio filter is the one most often forgotten — without it, the highest-yield names are typically those whose dividends are about to be cut.

Momentum with quality

Filters: price above 200-day moving average, six-month return above market average, positive earnings growth. Pure momentum filters return names that have already moved a lot; the earnings-growth check filters out the speculative end of that list. Pair with the indicators primer on what the moving-average rule actually says.

Where this fits on tickers.info

The screener page exposes every filter discussed above. The fundamentals primer explains what each metric means; the indicators primer covers the technical filters; the tickers and exchanges page covers the universe-bounding decisions. Once a shortlist exists, the per-ticker dashboard is where each candidate gets its individual reading.

Nothing on this page is investment advice. See the disclaimer for the full position.