The Dividend Stock Screener All Investors Need

Current low interest rate environment has made investors clamour for yield. There are two ways investors can find decent yielding investments. First is using dividend ETFs which invests in a broad portfolio of stocks that pay dividends. This takes away the stress and upkeep of tracking stocks. It can be an autopilot approach in managing investments. Investors that want to take control of the portfolio can use a stock screener to find dividend stocks. A dividend stock screener can save time carrying out the initial research in finding the right income stock for the portfolio. There are may dividend stock screeners available for investors. FINVIZ screener is the only simple, detailed and accurate.

By narrowing down the universe of stocks using a dividend screener, those that know what they are doing can really roll up the sleeves.

How to find good dividend stocks with a dividend screener

On the FINVIZ website select “Screener” tab from the menu.

Dividend Stock Screener

At first the number of options can be intimidating.

Dividend Screener

What we want is the dividend yield and select the minimum % you want. Important that investors not to choose a too high yield or a focus on the yield on small caps. There is no such thing as a free lunch, the higher the dividend yield is there for reason. Risk.

Dividend Screener pt2

We selected stocks that are in the S&P 500 with more 3% yield. Then we sorted the list by P/E. Another pro tip for investors is to watch out for low price to earning stocks. A low P/E stock means market expect the current earnings to decline. It should be used as a guide only.

From looking at the list above, we can see that there is broad sector coverage result from the dividend stock screen. There are some well known companies on the list like Macerich, Exoon (which we covered in our upgrade of energy company stocks) and Merck. As well as expected sector representation from Utilities.

On a more advanced level we can build on the previous screen by adding additional filters such as

1. Stock must have low current year earning growth (0 to 10%) in the next year

2. Stock must have  positive earning growth this year

3. Overall debt/equity ratio must be lower than 1.

Although the above criteria is stringent we use it as a example to see what shows up.

SPA ETF Stock Screener

You can see Exxon is still on the list. Interestingly, Procter & Gamble is also on the list. There is a world of difference in terms of market pricing where Exxon is at 11 p/e while P&G is 24.

Above shows the way you can play with the flexible FINVIZ screener. We like to start stringent and work backwards to see what the market is pricing in.

Alternative ways of using the screener include looking for good dividend stocks in specific sectors like utilities, REITs or financials. Also sorting by market cap can further narrow down to diversify the portfolio if your already overweight large caps or gain exposure to mid caps. Mid caps can be an opportunity as there is room to grow earnings and dividend overtime.

PEG Ratio Screener

PEG is the price earning growth ratio. It is a simple standardised metric used to measure to relative value of the current price verses the growth earning growth rate. An example of PEG is the price earning ratio of a stock is 10 and an expected earnings growth rate of 5% a year. The PEG is calculated as 10/5 = 2.

If a stock has an price to earnings ratio of 20 but with 30% growth ratio then the PEG is 0.67 (20/30). This shows investors are paying for growth and while the former has 10 p/e which can be considered cheap. The latter has a lower PEG which implies that investors in the latter stock is not paying as much as the former for growth.

By using a PEG ratio filer, this can shape the results either for investors can find value by finding growth stocks without paying a premium or avoid growth stocks and associated premium by setting a low PEG.

Preferred stock screener

Aside from screening for dividend from the list of all possible options. Investors can use preferred stocks are a core component of income generation for the portfolio. Preferred stocks can be considered safer due to their higher ranking on within the capital structure. This is at a cost of a lower total return for preferred stocks as the only return is from the stated income yield.

The question of either preferred stock vs dividend is dependent on investors risk appetite as well as the yield target of the dividend portfolio. An advantage of dividend investors is that by choosing the right dividend stock using the screener. Investors can find candidates that can growth their dividend payout overtime from increases in earnings. This is not possible with preferred dividends.


Dividend ETF Stock Screener

The screener can also be used to filter ETF based on dividend yield. For example the screenshot below shows that I filtered the universe of exchange traded fund and the criteria that the remaining ETF has to yield higher than 3%.

Dividend ETF Screener