Introducing Valuation Models! 
In the 1950s and 60s, Warren Buffett searched for stock ideas by reading the 26,000-page Moody’s Manual cover to cover.
This gave him an edge because he was able to find great stocks that most investors overlooked.
Today, we can find great ideas faster with stock screeners. Stock screeners let us filter the entire global market in seconds so we can find exactly the kinds of stocks we’re interested in.
This article covers 10 powerful stock screener strategies that you can use to generate stock ideas across 6 different investing styles:
- Value
- Growth
- High-Quality
- Dividend Investing
- Deep Value
- Small-Cap & Micro-Caps
Let’s dive in!
What are Stock Screeners?
Stock screens help you filter the market, showing only stocks that meet your specific criteria.
Below, I’ll share 10 of the best screeners you can use.
First, these are some different filters you can add to any of the screens below
Additional Filters
To refine the results you get from these stock screeners even further, you can try adding these kinds of filters:
- Exclude certain industries (energy, mining, financials, biotech)
- Filter by region (US-only or international stocks)
- Set a market cap range (large-cap, mid-cap, or small-cap focus)
- Limit to profitable companies (net margin greater than 0%)
It’s generally best to aim for a sweet spot of getting 10-50 results with each stock screen that you run.
If you’re getting less than 10 stock ideas per screen, you might not find enough stocks that you like for further research, while if you get over 50 ideas, you might not have time to sift through all of them.
Small-Cap & Micro-Cap Screeners
Sometimes, the best value is where nobody’s willing to look.
If you’re looking for undervalued small-cap or micro-cap stocks, apply a market cap filter to any of the screeners below to focus on smaller companies that match your investing style.
Market Cap Limits:
- Small-Cap: Less than $2 billion
- Micro-Cap: Less than $250 million
Why use it? Smaller stocks often have more room to grow and can be mispriced due to lower analyst coverage.
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Value Stock Screeners
1. The Magic Formula
Inspired by Joel Greenblatt’s The Little Book That Still Beats the Market, this screener identifies undervalued companies with strong returns on capital.
Example Stocks: SLB, FANG, FSLR, SMCI
Key Filters:
- High Return on Capital (ROIC) (over 20%)
- Low Valuation (EV/EBIT) (less than 10x)
Why use it? Finds companies with strong earnings power trading at attractive valuations.
2. The Biggest Losers
Markets often overreact to bad news by pushing down stock prices more than the fundamentals justify.
This screener finds beaten-down stocks that may be undervalued.
Example Stocks: MDB, DLTR, DG, PATH
Key Filters:
- Stocks down over 30% in the past year
- Expected revenue and EBITDA margin growth going forward
Why use it? Identifies stocks that might be temporarily undervalued due to bad news.
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Growth Stock Screeners
3. Growth at a Reasonable Price (GARP)
The GARP strategy popularized by Peter Lynch balances growth and valuation by finding high-growth stocks that are trading at reasonable prices.
Example Stocks: PDD, ALL, EXPE, ANF
Key Filters:
- 20% expected EPS growth
- 20% return on capital employed (ROCE)
- Forward P/E less than 20
Why use it? Helps investors find growth stocks that might be undervalued.
4. Revenue Rockets
Finds high-growth stocks with excellent balance sheets and pricing power.
Example Stocks: NVDA, NU, RELY
Key Filters:
- Revenue growth greater than 25% annually
- Expanding gross margins
- More cash than total debt
- Forward P/E less than 40
Why use it? Identifies businesses seeing fast revenue growth while maintaining financial strength.
High-Quality Stock Screeners
5. The Buffett Moat Screener
Warren Buffett prioritizes companies with durable competitive advantages.
This screener attempts to identify these kinds of businesses by filtering for companies with high returns on capital alongside growing revenue and gross margins.
Example Stocks: LLY, HD, PM, APP
Key Filters:
- Profitable companies
- ROIC greater than 25%
- Revenue and gross margin expansion over the next three years
Why use it? Helps find businesses with long-term pricing power and high returns on capital.
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6. Scalable Kings
This screener looks for businesses with strong operating leverage, which means they’ve been able to increase their operating margins.
Example Stocks: XOM, NOW, NEE, NXPI
Key Filters:
- Gross margins greater than 50%
- Operating margins have increased by more than 5% annually over the past three years
Why use it? Identifies scalable business models that generate increasing profitability with growth.
Dividend Investing Screeners
7. High Dividend Yields
This screener identifies companies with extremely high dividend yields (over 7%) while filtering for sustainability with a requirement for a 70% payout ratio or lower.
These stocks require a lot of research! Investors should watch out for dividend cuts, high debt, and overall bad businesses.
Alternatively, you’d find higher-quality companies by lowering the required dividend yield to 3% or 5%.
Example Stocks: ZIM, NFE, GES, GSL
Key Filters:
- Dividend yield greater than 7%
- Payout ratio less than 70%
Why use it? Finds high-yielding dividend stock ideas for income-focused investors. However, these require careful due diligence to avoid dividend traps.
8. Dividend Growers
Dividend growth stocks can be the “best of all worlds” for investors because they offer rising dividend payments, and these stocks tend to see their share prices rise because they’re also growing earnings-per-share.
This screener identifies stocks that are increasing their dividends to shareholders and seeing strong earnings growth to fuel the dividend increases.
Example Stocks: DELL, YUM, DPZ
Berkshire Hathaway has over $500 million invested in Domino’s Pizza!
Key Filters:
- Dividend and EPS growth greater than 5% annually
- Dividend yield greater than 1% with a payout ratio less than 70%
Why use it? Focuses on companies with sustainable and growing dividend payments.
Deep Value Screeners
9. Deep Value
This deep value screener looks for stocks trading at less than 20% of book value.
Most of these stocks are cheap for a reason, but there are definitely some hidden gems here if you’re willing to do some legwork!
Key Filters:
- US stocks trading at less than 20% of book value
- Debt/EBITDA less than 3x
For the best opportunities, investors should look globally rather than focusing on a single region like the U.S.
Why use it? Identifies stocks that could be significantly undervalued.
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10. Ben Graham’s Net-Nets
Net-nets are stocks that have a market cap less than total current assets (cash, receivables, etc) minus total liabilities (total debt).
In other words, these stocks are incredibly cheap. However, they usually aren’t the highest quality stocks.
Warren Buffett’s mentor, Ben Graham, pioneered the net-net investing strategy. Both Ben Graham & Warren Buffett saw some of the highest annual returns of their careers while investing in net-net stocks.
Net-net opportunities are rarer today, but investors can find ideas by looking globally.
Key Filters:
- Net current asset value (current assets minus total liabilities) is less than 70% of the company’s market cap
- Revenue and EPS have grown over the last 3 years
Why use it? These stocks trade at extreme discounts, offering high potential upside if business conditions improve.
FAQ Section
What is stock screening and why is it important?
Stock screening is the process of using specific criteria to filter and identify stocks that meet certain investment objectives. It is important because it allows investors to narrow down a large universe of stocks to those that match their desired financial metrics and risk profile.
How can I identify undervalued stocks through stock screening?
To identify undervalued stocks, use screening criteria like low price-to-earnings (P/E) ratios, low price-to-book (P/B) ratios, and strong cash flow generation. These metrics can help highlight stocks trading below their intrinsic value relative to their financial performance.
What are the best financial ratios for screening undervalued stocks?
The best financial ratios for screening undervalued stocks include the P/E ratio, P/B ratio, price-to-sales (P/S) ratio, and free cash flow yield. These ratios help assess whether a stock is undervalued relative to its earnings, assets, and sales.
How do growth and value screening strategies differ?
Growth screening focuses on identifying companies with strong revenue and earnings growth potential, while value screening focuses on finding stocks that are undervalued based on their financial fundamentals. Investors may use a combination of both strategies to find high-potential opportunities.
How can I use stock screening to manage risk?
Stock screening can help manage risk by filtering for companies with strong balance sheets, consistent earnings growth, and low debt levels. It is also important to diversify across sectors and industries to reduce exposure to any single risk factor. Thorough research and ensure they understand the company’s fundamentals before investing.
TIKR Takeaway
Using stock screeners can help you find high-quality investment opportunities faster.
By applying the right filters, you can narrow down the market and focus on stocks that align with your investing strategy.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks, so if you’re looking to find the best stocks to buy for your portfolio, you’ll want to use TIKR!
TIKR offers institutional-quality research for investors who think of buying stocks as buying a piece of a business.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold any positions in the stocks mentioned in this article. Thank you for reading, and happy investing!
