The Best Free Stock Screeners

A friend of mine once called the internet “an ocean of crap with a thin layer of cream on top”.

The internet has democratized stock research and put the tools of professional investors into the hands of retail guys like you and me. In the past, people would pay exorbitant amounts to be able to get access to information that can now be reached at the click of a button. However, there is also a lot of garbage out there.

Here are the best stock screeners you should be using, measured by ease of use and breadth of screening criteria.


StockRover – Best All Round Winner

This web-based screener has pretty much everything you could want, including decile rankings, industry comparisons, and more financial ratios than FinViz. The software also has a bunch of pre-loaded screens, portfolios, and stock “grading systems” that can provide a starting point for your own research. The site has a more sophisticated feel to it than many of its competitors, and it surpasses them in ease of use, making it my go-to screener. The software also includes a pretty useful charting feature with graphical representations of events such as dividends or earnings, or max drawdowns over a specified period. Altogether, there are enough features in this screener to warrant keeping it open on one of your screens for most of the day.


FINVIZ – Best All Round Honorable Mention

This screener has about the same selection of fundamental and technical screening tools as, all packaged in an easy to use web-based form. This screener comes in a close second for the wide variety of things it can do, which should satisfy the majority of investors. One of my favorite features is the charts, where trend lines and support/resistance lines are automatically drawn on. However, a few minor gripes prevent this from being the standout winner.

Firstly, if you’d like to pre-load your own portfolio or watch-list, you are limited to 50 stocks. This is no big deal for most investors, but if you have your own larger list of potential stocks that you’d like to screen, you have to set up a number of separate portfolios.

Secondly, you can only filter by absolute values, rather than values relative to peers. If you want to work out which stocks are in the cheapest decile or quartile for their industry on a P/B basis, you have to work it out yourself.

Lastly, and less of an issue for many people, is that they don’t have EV/EBITDA. I understand they can’t accommodate every ratio for every investor, but given the growing consensus of this ratio as one of the best valuation metrics I would have expected to see it in this screener.


Google Drive/Google Finance/Yahoo Finance – Best for Customization

Google finance offers one of the simplest stock screeners out there, but when combined with Google Drive the power of the site is properly realized. Prior to using StockRover I made my own stock screener by pulling data from Google Finance and Yahoo finance into a spreadsheet on Google Drive. The data you can pull from Google Finance is fairly rudimentary, but once you have the data in your spreadsheet you can search and manipulate it the same way you would any spreadsheet data. Here is a quick idea of what you can do using Google Finance, and here is an even better version using Yahoo finance.

If you have enough time and desire to build your own screener, I would definitely recommend it, but just be prepared to do a lot of work on it. Currently I use Google Drive for monitoring my trades and maintaining records as the data is so easy to manipulate and filter, but I use standalone sites for normal stock-screening.

Which Stocks Should we Sell Puts On?

This is the blueprint I use to find the stocks I can sell puts (or covered calls) on. It’s pretty simple – we’re essentially looking for good stocks that are trading cheaply and have some downside protection.

We have 3 basic steps for finding good stocks on which we can sell puts. We need to:

1) Find good stocks

2) …that are trading cheaply

3) …and then enter the trade at the right time.

So let’s take a look at how to use a free screener to find these stocks.

Finding good stocks can be tricky


1) Finding good stocks to sell puts on

A good stock for a dividend value investor is a company with a significant competitive advantage (often called an “economic moat”) with a consistent cash flow to support a stable, growing dividend.

One of the easiest places to find a starting list of suitable stocks is the Dividend Aristocrats list. This is a diverse list of over 50 highly liquid, blue-chip stocks that have followed a policy of consistently increasing dividends every year for at least 25 years. You’ve probably heard of many of these companies – like McDonalds, Walmart, Coca-Cola, and Proctor & Gamble. If this list is not large enough, you can go into the Dividend Achievers list, which has similar requirements except that dividends only need to have been increasing for the last 10 years.

Of course, the best way is to get someone smarter than you to do the work first, which is why I also like to look at Warren Buffett’s top holdings, which is disclosed on a quarterly basis in the company’s 13-F filings. I generally use the stock screener which has Warren Buffett’s top 25 holdings pre-loaded.

These three lists will generally give me a universe of nearly 200 stocks, the majority of which a fairly high quality.

To make the list even higher quality, I use my stock screener ( to filter out any stock on the list that has a dividend yield of under 2%, or has a payout ratio above 70%. The payout ratio is how much of a company’s earnings is paid out as dividends. If this ratio is too high, then any decrease to the earnings in future will likely translate into reduced dividends. We want stable, growing dividends, so we prefer payout ratios under 70%.

These companies are leaders in their field, and likely have been for many years. If you want to filter the list further I would recommend screening by free cash flow (FCF) to sales. Free cash flow is the cash that is left over after the company has paid its bills and made any investments. Companies that can generate 10 cents of free cash or more on each dollar of sales (i.e. have a FCF/S ratio of over 10%) likely have a strong competitive advantage. Be aware though, that this high standard will make it very hard for some industries to make it through the filter (particularly retail companies).


2) Filtering for cheapness

Screening for cheap companies is essentially about working out what you are paying for an asset and then comparing this with what you are getting in return. This is why metrics for valuations of companies are often ratios of some form of PRICE divided by some form of RETURN.

Cheep cheep cheep
Cheep cheep cheep

The most basic valuation metric of this kind is the price to earnings (P/E) ratio. You are paying a certain price for a stock, and you are getting some earnings in return. Ideally the P/E ratio is low – i.e. you a paying a low price and getting significant earnings in return.

Alternatively you can use a price to book (P/B) ratio as a measure of cheapness. Again, here you a paying a certain price for an asset, but instead of using earnings as your return, you are using the book value of the company (what the company would be worth if it liquidated itself) as your measure of what you are getting for buying the stock.

There are a number of alternatives we can use for the PRICE part of the ratio, and a number of alternatives we can use for the RETURN part of the ratio, but the key is that they all measure the same kind of thing – the CHEAPNESS of the stock you are buying. The following chart shows the average annual performance of the cheapest 10% and most expensive 10% of large US stocks according to a number of different measures of “cheapness” between 1964 and 2009:

Data from "What Works On Wall Street" 4th edition.
Data from “What Works On Wall Street” 4th edition.

A gradual consensus is emerging that the best price identifier of cheap stocks is EV/EBITDA ratio. Interested readers should read this post at Greenbackd, but the basic idea behind it is that the price measure of enterprise value (EV) takes into account a company’s leverage, while the returns measure of EBITDA (earnings before interest, taxes, depreciation, and amortization) is less easily manipulated by companies compared to other forms of earnings.

However, what the above table clearly shows is that almost all value metrics work to some degree. As a result, I recommend using whatever is easiest to calculate in your own screener. StockRover is capable of ranking stocks by EV/EBITDA, which is great, but this unfortunately ignores the fact that we really should be comparing these ratios only within industries. StockRover can also rank stocks by P/E decile within their industry.

As a rule of thumb, I would consider a stock to pass the cheapness test if the EV/EBITDA ratio was under 15, or if the company ranked in the top 3 cheapest deciles of P/E within each industry. Using a stock screener, you can screen for these companies very easily.


3) Screening for the correct entry

We already have some downside protection by virtue of the fact that we have a list of good, dividend-paying stocks that are already cheap. These are stocks that we would like to own because their value will likely increase over the medium to long term. However, in the short term the stock may easily fall due to technical factors. Ideally, we would like to sell puts on a stock that has had (or is having) a pullback within the context of a longer term uptrend. This allows us to sell puts for a higher price (as stock volatility has increased), towards the lower end of the stock’s historical range, with greater upside for us in case we are assigned and the longer term uptrend continues.

To identify a stock that may fit these criteria I screen for an RSI below 50 (i.e. oversold to some degree), but above the 50 day simple moving average. I will also look at the chart of every stock that is in my filtered list to see if there is a defined resistance point, below which I could sell a put.


… and some final considerations

The last thing to do before entering a trade is to use your discretion to consider your total downside risk. It can be easy to get caught in a large downswing with little protection when you are sell puts. I like to look at previous drawdowns in the stock’s price (particularly 2008-2009) and consider whether my portfolio could handle a drawdown of that magnitude again. I like to look at when the company is reporting earnings, and when the next ex-dividend date is. Both of these should be available through your broker. Most importantly you need to continually ask yourself – DO I WANT TO OWN THIS STOCK?