Dividend Stock Screener
- StockRover -

Need a free dividend stock screener? Good news - StockRover Basic includes the criteria needed to build the screen. And it can be set up to screen a custom universe or an imported list of dividend paying stocks like the Dividend Champions. 

Need additional refinements like multi-factor weighting? You can step up to StockRover Premium.

"Basic" Dividend Stock Screener

The screen below shows the specified strategy criteria and limits using only criteria available in the Basic StockRover screener. Although available in Basic, dividend growth is not used in this screen example.

Both forward looking dividend yield and dividend yield for the previous 12 months are available. The yield for the previous 12 months (TTM Yield) is used.

As each criteria is entered, the number of passing stocks from the indicated exchanges is also shown. In this case, 104 of the 7642 stocks pass the screen.

StockRover Basic dividend yield screen

NOTE: The MorningStar Financial Health Grade criteria is not checked so it is not applied by StockRover when the screen runs. Even though it is not used in the screen, because it is listed in the screen it shows up in the results view.

Rather than adding more criteria to create a custom universe, the Dividend Champions list was uploaded to a StockRover watchlist. This list meets the Weiss requirement for dividend paying history. Since the Champions contain over the counter stocks (OTC), the exchange criteria excludes them from the results.

Applying the above screen to the Dividend Champions watchlist results in 8 passing companies. With the exception of TROW, the yields are not significant. 

Dividend Champion stocks that passed the StockRover Basic dividend yield screen

Some options to increase the number of passing companies:

  1. Relax some of the criteria. For example, raise the minimum payout ratio. But a bigger list (see 2 & 3) is probably a better idea.
  2. Import the Dividend Contenders list along with the Dividend Champions. If not all of it, perhaps those companies with at least 20 years of dividends.
  3. Use the Dividend Detective list of 800 high dividend stocks. Note that this list includes REITs and MLPs. Harry Domash is the driving force for Dividend Detective and author of Fire Your Stock Analyst. Our book review.

Managing Your Strategy in StockRover

There are some basic portfolio decisions to make at this point.

1 - How many stocks to hold

One option is simply to buy all the stocks that pass the screen. So if 8 stocks pass, you buy 8. If 3 pass, you buy 3. This is used by AAII to create the performance charts for each of their pre-built strategies.

Downside? Buying 104 companies isn't feasible even in a fractional broker like Folio Investing.

The other option is to select a specific number of stocks.

The standard most often published is to hold 20 to 30 stocks in a portfolio - mostly to spread the risk over more companies. It makes sense if you are running a mutual fund or if you are only implementing 1 strategy. But that is a lot of companies if you have more than 1 portfolio. 

To illustrate the options and how to manage them, the following discussion will plan to hold 5 positions.

2 - How often to check

Most published dividend/income strategies have a target holding period of at least 1 year.

But, there are also clear sell signals for a dividend/income strategy. If the dividend is cut, sell. Or if the financial strength weakens, sell. With that in mind, it is a question of how often to check for selling, not for buying.

For the StockRover examples (Basic & Premium), the plan will be to check each week. It is very little effort and can spot failure early.

If something needs to be sold, run the screen to find a replacement.

What to Buy

Buy candidates are identified by running a screen.

In the examples above, the general screen passed 104 companies from the StockRover database and 8 companies from the Dividend Champions list.

But, we decided to hold 5 companies.

NOTE: Lists of dividend paying stocks are not static. It is necessary to refresh/upload a current list each time the buy screen is run.

Quantitative (Mechanical) Approach: The simplest solution is to sort the passing companies by yield; then pick the highest yielding companies. As many as needed to get the portfolio to 5. This is reasonable because every company that passed the screen met our strategy criteria and should be acceptable. In StockRover Basic, ranking is only possible on one variable.

Qualitative Approach: Analyze the companies subjectively to identify those with the best prospects. If this amounts to more screenable criteria, modify the buy screen to apply those criteria. Reduce the subjective analysis to a minimum.

Don't forget to save what you buy to a StockRover Portfolio.

When to Sell

StockRover makes it easy to detect financial weakness. If we use the following as limits for selling a stock:

  • Current Ratio < 1.75 (buy criteria is > 2.0)
  • Debt/Equity > 0.35 (buy criteria is < 0.2)
  • Payout Ratio > 65 (buy criteria is < 50)

This allows a little wiggle room, but there is a cutoff. Simply create a screen for each of the criteria and run the screen against the Dividend Portfolio (the companies held must be in the portfolio).

Any company passing a screen should be sold.

Including all 3 sell criteria in a single StockRover screen would create a sell signal only when all conditions are met. Not just a single condition. Therefore a screen is required for each sell condition.

Dividend cuts must be tracked manually. Formulas are not possible in Basic and cannot be applied to a portfolio. There is no single criteria to identify a dividend cut.

If something needs to be sold, find a replacement using "What to Buy".

Dividend Stock Screener Variations

StockRover is rich in criteria applicable to a dividend based investing strategy. For example, a debt to capital ratio (suggested by Josh Peters in The Ultimate Dividend Playbook) is available. Even in Basic.

As mentioned earlier, a forward looking dividend yield and the dividend yield for the last 12 months are available.

But Premium has some distinct advantages. For example, buyback yield is available and can be used to filter out companies that issued more shares than they bought back.

Even more interesting, it is possible to add weighting to criteria for ranking purposes and limit the number of passing companies. Weighted criteria can only be used on the StockRover database, not a watchlist.

The Premium version of StockRover is used to illustrate some of the variations.

Premium Dividend Stock Screener

Below is the dividend yield screen created in StockRover Premium.

Notice that 4 of the criteria are weighted:

  1. Current Ratio - 15%
  2. Debt/Equity - 15%
  3. TTM Yield - 35%
  4. Forward Dividend Growth - 35%

Why? It allows the companies passing the screen to be ranked using the weightings provided (the selected percentages are for illustration purposes only). Each passing company's current ratio will be ranked and the result will count toward 15% of the total rank. Each passing company's dividend growth will be ranked and count toward 35% of the total rank. And so forth. There is a more complete description of stock ranking here.

Not shown (but important) is that the screen will only identify the top ten passing companies with the highest total rank.


StockRover Premium screen for dividend stocks using weighted criteria for ranking and limiting the number of passing companies to the top ranked 10.

Buy the top 5 ranked companies.

Ten stocks were requested even though only 5 are needed to satisfy the portfolio requirement. Since there are no criteria in StockRover to eliminate MLPs and REITs, additional companies are shown in case one or more of the top 5 is an MLP or a REIT.

Passing companies using criteria weighting in StockRover Premium

Notice that both TROW and BEN appear in the ranked results of the premium dividend stock screener and the dividend champions list in the basic dividend stock screener. Even though there is no dividend history in the premium version.

Another variation - it might be interesting to see which top ranked stocks exist in one of the dividend stock lists.

Conclusions

If backtesting is not a requirement, StockRover handles everything a dividend stock screener should. In addition to the examples above, there are additional pre-built screens for dividend/income investing strategies.

To see our reviews

For StockScreening101, StockRover has a special one-time discount as well as their free trial. See offer.

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