Start from a goal, not a stock
Most people start stock research backwards — they hear a company name, then look for reasons it might be a good buy. Screening works better in the opposite direction: start with what you actually want from an investment, and let that shape which companies you even look at.
“I want income I can rely on” and “I want to buy something undervalued” point toward completely different lists of companies. Getting clear on which one you’re actually optimising for is the first filter, before any numbers get involved.
Turning a goal into testable criteria
A goal like “steady income” isn’t something a screener can search for directly — it needs to be translated into numbers a screen can actually test. That usually means picking one or two metrics that act as a reasonable proxy for the goal, even though no single number ever captures it perfectly.
| Goal | Possible criteria |
|---|---|
| Steady income | Dividend yield above a threshold, consistent payout history |
| Buying undervalued | Low PE ratio relative to sector, low price-to-book |
| Financial stability | Low debt-to-equity, positive free cash flow |
Three worked examples
Take “I want income I can rely on.” A reasonable first pass might be: dividend yield above 4%, and a payout ratio under 80% so the dividend isn’t eating the company’s entire profit. That’s already two criteria and a workable starting screen — see the site’s dividend yield screening guide for how this plays out with real criteria and thresholds.
Take “I want to buy something the market has overlooked.” A starting screen here might combine a PE ratio below the sector average with a market capitalisation under a certain size, on the reasoning that larger, well-covered companies are less likely to be mispriced in the first place.
Take “I want exposure to a specific theme,” such as REITs. Here the starting filter is simpler — sector or classification — and the more useful criteria come after that, comparing yield and gearing across the REITs the sector filter returns.
Narrowing a result list that's too broad
If a screen returns forty companies with little in common beyond the one metric you filtered on, that’s usually a sign the criteria need a second dimension, not that the tool has failed. Adding a second filter that reflects a different part of the same goal — a payout ratio ceiling alongside a yield floor, for instance — tends to sharpen a list faster than tightening the first filter further.
What a shortlist is — and isn't
A list of companies that pass your criteria is a research queue, not a buy list. Screening tells you which companies are worth spending an hour reading their annual report — it doesn’t replace that hour. For the mechanics of running a screen in the first place, see how to use a stock screener.
Sources
This page summarises publicly available guidance on stock screening approaches. It is not written or reviewed by a named stockscreener.asia team member — for a hands-on walkthrough of finding stocks by criteria, refer directly to the primary source below.