Stock Screeners

A question came up recently in an email, about how to find stocks trading below a certain price. You can look through stock lists, or you can save lots of time by using a stock screener. A stock screener is a tool that displays stocks depending on the criteria you want. Depending on the screener, the criteria can range from share price, to dividend payout ratio, to earnings growth, and so on.

While this is intended mainly for novice investors, I hope the list is helpful to seasoned investors as well. Maybe they'll find a screener that's better than the one they use.

Every discount broker has a stock screener. My favorites are at Scottrade and TDAmeritrade.

Free Stock Screeners

MSN Money Deluxe Screener

This is by far the best free stock screener out there (ETFs are included in its results). It has an intuitive interface with over 500 criteria to choose from. Not only can you set custom values for your criteria (say you want to find companies with returns on equity of 15% or greater), but you can also filter companies by comparing them to other companies or to their industries. For example, instead of setting return on equity to 15% or greater, you can set it to below industry average, at industry average, above industry average, x% above industry average, x% above another company's return on equity, and so on.

The MSN screener also gives you the option of making your own, custom criteria. For example, if you want to find companies whose 5 year dividend growth rate is greater than industry average earnings per share growth rate, just plug those values in. Want to develop your own ratios? Go ahead. How about companies whose P/E divided by 5 year average earnings per share growth rate plus five year average dividend yield [PE/(5 year average EPS Growth Rate + 5 year average dividend] is greater than .5? Just plug it in.

Besides the standard operators of less than, greater than, equal, less than or equal to, greater than or equal to, the MSN stock screener adds flexibility with operators like "high as possible," "low as possible," "near," and "display only."

Suppose you want to use your criteria to search for stocks at some future time. The MSN stock screener gives you the ability to save or export your criteria. Want to save your results? You can export them to an Excel file. (If you don't have Excel, no worries. Try Open Office. It's a free office suite that, in my opinion, is better than MS Office. It opens all MS Office files, including Excel files. Google Docs also has a free spreadsheet program that can open Excel files). You can also save your results to a text file. If you have an MSN Money portfolio, you can export your results there too.

Additionally, the screener has many preset screens to get you started.

MSN also has a mutual fund screener, which works the same way.

Having trouble with the screener? Harry Domash has a lot of great articles demonstrating the power of the MSN screener. Please note, however, that Domash's stock picks might not be so good. I haven't checked his performance lately, but last time I did, the majority of the stocks he selected using his screening techniques were down quite a lot. (I even toyed with the idea of setting up a model portfolio that shorts all his selections, but haven't gotten to that yet. Perhaps for a future post).

So what's the catch with this free, incredibly powerful tool? Rarely, the data are a wrong. This is a problem all stock screeners have in common. Never trust screeners completely, and don't base your trading decisions only on your screen results. Rather, use them as part of your initial research.

The drawback unique to MSN's screener is that you have to install MSN Money Investment Toolbox to use it, and this requires Internet Explorer and possibly having Windows installed on your machine. It doesn't work on Firefox or other browsers. There might be ways to get around this. Linux users (I'm a happy Ubuntu user) might try running Internet Explorer with Wine.


Yahoo! Finance

Behind MSN is Yahoo!'s Java based screener. It has around 150 criteria from which to choose. It's not as robust as MSN's, but if you can't use the MSN screener, this is the next best thing. It will run on every computer that has Java installed and enabled.

You can search for stocks, bonds, and mutual funds. The Yahoo! screener allows you to save your screens, and to export your results to a spreadsheet. If you have a Yahoo! Finance portfolio, you can export your results there as well. There are a number of preset screens to get you started.


Reuters used to have a pretty good stock screener, comparable to MSN's. Maybe it still does, but I can't find it on their site. The decent, but very limited ETF and Mutual Fund screener is still available.


Google, Yahoo!, and MSN have the best basic stock screeners--those where you don't have to load anything. The criteria to choose from are much more limited than the Deluxe MSN screener and the Java Yahoo! screener, but are enough for most quick screens. Among these, I like Google's the best.

Other screeners with limited criteria, but useful for quick screens:

AOL

CNBC

Kiplinger

Market Watch



I wrote earlier about how you might already be paying for various financial databases such as Morningstar and Value Line, whether through college tuition or through your portion of taxes going to your local public library. Be sure to check these resources. The Morningstar library edition, for example, has a pretty good screener similar to MSN's. While it's not as flexible as MSN's, it gives you the ability to search for stocks using Morningstar's premium data (e.g., you can search for stocks based on Morningstar grades, etc).

Happy screening!