How To Hunt for Quality Stocks
Over 100 Quality Stocks
Finchat is an amazing tool.
I use it to create investment cases and find interesting stocks to buy.
Today I’ll show you how to screen for quality stocks.
Multiple Roads
First of all, it’s important to understand that multiple roads lead to Rome.
You can use different screening criteria to find great stocks.
There is also no golden truth in the criteria used in these screeners.
That’s why it’s interesting to use different variants.
In this article, I’ll show you three screening criteria you can use to find the best companies in the world.
Getting Rich: Quality Stocks with a lot of growth potential
Staying Rich: Established Quality Stocks
Living Rich: Quality Stocks with an attractive dividend yield
Finchat
We will use the stock screener of Finchat to screen for quality stocks.
You can go to the Finchat stock screener by following these steps:
On the left, click on the ‘Screener’ section
Screen for Getting Rich Stocks
Here are the criteria I use:
Revenue growth > 9% per year
EPS growth > 12% per year
FCF / Net Income > 80%
Profit Margin > 10%
ROIC > 15%
Net Debt / EBITDA < 3X
Please note that for the Revenue and EPS Growth, we want the historical growth as well as the outlook to be higher than 7% and 9% per year respectively.
In Finchat, the screening criteria look like this:
The companies that match these criteria:
Screen for Staying Rich Stocks
The criteria we use:
Revenue growth > 5% per year
EPS growth > 7% per year
FCF / Net Income > 80%
ROIC > 15%
Net Debt / EBITDA < 3X
Debt/ Equity < 80%
In Finchat, the screening criteria look like this:
The companies that match these criteria:
Screen for Living Rich Stocks
The criteria we use:
Dividend Yield > 2%
Payout Ratio < 90%
Dividend Per Share 5-Year CAGR > 10%
Profit Margin > 5%
ROIC > 10%
Net debt / EBITDA < 3X
In Finchat, the screening criteria look like this:
The companies that match these criteria:
Conclusion
That’s it for today.
Did you get some investment inspiration?
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Pieter
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Finchat: Financial data