Top 25 Screening Strategies That Actually Make Sense

Stock screening is both an art and a science. The right screening strategy can surface investment opportunities you would never find through casual browsing, while the wrong one can lead you to statistically cheap stocks that are cheap for very good reasons.

We have compiled 25 screening strategies that are grounded in academic research, used by professional investors, and practical enough for individual investors to implement. These are not theoretical constructs — they are strategies with real track records. We have organized them by investing style so you can find the ones that align with your approach.

Key Takeaways

• No single screen works in all market conditions. Diversify your approach across value, growth, and quality factors.
• The best screens combine multiple factors. Single-factor screens generate too many false positives.
• Always treat screen results as a starting point for research, not a buy list. Screening narrows the universe; due diligence makes the final call.
• Rerun your screens quarterly to catch new opportunities and identify stocks that no longer qualify.

Value Screening Strategies (1-7)

Value strategies focus on buying stocks trading below intrinsic value. The core principle is that the market sometimes misprices companies, and patient investors can profit from those mispricings.

1. Graham Net-Net Screen: Find stocks trading below net current asset value (current assets minus total liabilities). This is the deepest value screen — you are buying companies for less than their liquidation value.
2. Low P/E + High Dividend Yield: Screen for P/E below 12 and dividend yield above 3%. This classic value screen finds cheap, income-producing stocks that the market may be overlooking.
3. Magic Formula (Greenblatt): Rank stocks by earnings yield (EBIT/EV) and return on capital (EBIT/net tangible assets). Buy the top-ranked stocks. Joel Greenblatt's backtesting showed this approach significantly outperformed the market.
4. Low EV/EBITDA + Positive FCF: Screen for EV/EBITDA below 8 with positive free cash flow. This finds operationally cheap companies that generate real cash, filtering out leveraged value traps.
5. Dogs of the Dow: Buy the 10 highest-yielding Dow Jones stocks annually. Simple, mechanical, and historically effective as a contrarian value approach to blue-chip investing.
6. Price-to-Book Below 1.0: Screen for stocks trading below book value with positive earnings. This surfaces asset-heavy companies the market is pricing below their net worth.
7. Contrarian Earnings Recovery: Find companies with improving earnings after a decline, trading at low P/E. The idea is to catch companies turning the corner before the market fully recognizes the recovery.

Growth Screening Strategies (8-13)

Growth strategies look for companies with accelerating or sustainably high growth rates, betting that continued growth will drive stock prices higher.

1. CAN SLIM Revenue Screen: Inspired by William O'Neil, screen for quarterly revenue growth above 25%, annual earnings growth above 25%, and ROE above 17%. This targets high-momentum quality growth.
2. PEG Below 1.0: Find stocks where the P/E ratio is less than the expected earnings growth rate. Peter Lynch's favorite metric for finding growth at a reasonable price.
3. Revenue Acceleration: Screen for companies whose year-over-year revenue growth rate is accelerating (this quarter's growth rate exceeds last quarter's). Acceleration often precedes big stock moves.
4. Rule of 40 SaaS Screen: For software companies, add revenue growth rate to profit margin. If the sum exceeds 40, the company is balancing growth and profitability well.
5. Emerging Growth Screen: Find small-cap companies with revenue growth above 20%, positive cash flow, and low analyst coverage. Less-followed companies are more likely to be mispriced.
6. Consistent Compounder: Screen for companies with at least 10% annual revenue AND earnings growth for 5+ consecutive years. These rare compounders are the backbone of great long-term portfolios.

Quality Screening Strategies (14-19)

Quality strategies identify companies with superior business characteristics — high returns on capital, strong balance sheets, and sustainable competitive advantages.

1. High ROIC + Low Debt: Screen for ROIC above 15% with D/E below 0.5. This finds companies generating excellent returns without relying on leverage — the hallmark of competitive advantage.
2. Wide Margin Screen: Find companies with gross margins above 60% and operating margins above 20%. Wide margins indicate pricing power and operational efficiency that competitors struggle to replicate.
3. Piotroski F-Score Screen: Joseph Piotroski's 9-point scoring system evaluates profitability, leverage, liquidity, and operating efficiency. Stocks scoring 8-9 have historically outperformed significantly.
4. Cash Conversion Champions: Screen for companies where free cash flow consistently exceeds net income. Strong cash conversion indicates high-quality earnings that translate into real shareholder value.
5. Asset-Light Moat Screen: Find companies with high ROE (above 20%) and low capital intensity (capex-to-revenue below 5%). These businesses generate enormous returns because they require little capital to operate.
6. Altman Z-Score Safety Screen: Use the Altman Z-Score to filter out companies at risk of financial distress. Scores above 3.0 indicate financial health; below 1.8 suggests elevated bankruptcy risk.

Dividend and Income Strategies (20-25)

Dividend strategies focus on generating income while investing in companies with the discipline to sustain and grow shareholder payments.

1. Dividend Aristocrat Filter: Screen for companies with 25+ years of consecutive dividend increases. These companies have demonstrated commitment and ability to grow dividends through multiple economic cycles.
2. High Yield + Low Payout: Find stocks with dividend yields above 3% but payout ratios below 60%. This combination suggests a sustainable dividend with room for future growth.
3. Dividend Growth Rate Screen: Screen for 5-year dividend growth rate above 10% with a current yield above 1.5%. Fast dividend growth compounds powerfully over time, often more so than a high starting yield.
4. FCF Yield Above Dividend Yield: Ensure free cash flow per share exceeds the dividend per share. When FCF yield is well above dividend yield, the dividend is well-covered and likely to grow.
5. REIT Income Screen: For real estate investors, screen REITs by funds from operations (FFO) yield, occupancy rates, and debt-to-assets ratio. REITs use different financial metrics than traditional companies.
6. International Dividend Screen: Expand beyond US stocks to find international dividend payers with yields above 4% and strong currency stability. Global diversification adds another layer of risk reduction.

Put These Strategies to Work

Every strategy above can be implemented using our stock screener. Start with one of our presets — Value, Growth, Quality, or Dividend — as a foundation, then customize the filters to match the specific strategy you want to test. The best investors often combine elements from multiple strategies to create a personalized approach.