One of the most challenging aspects in successful investing is deciding where is best to invest your hard earned money. The choices are seemingly endless with mutual funds, stocks and bonds, ETFs and many other investment products competing for your attention.
While the choices may seem overwhelming, there are ways that you can sort through the clutter and find the investment products and securities that are right for you.
It is important to understand your investment objectives, time frame for investing, and available capital prior to searching for specific investment products and securities, as these will give you a guideline when searching for potential investments.
The most common, and easiest to use tool for making investment choices is a stock screener, which can be an invaluable tool for not only screening for potential investments, but also identifying the best price possible for a given security.
A stock screener is a very useful tool that lets you for search for stocks that meet a number of criteria including:
- Market Cap
- P/E Ratio
- Last Price
- Earnings per share (EPS)
- Historical Prices
- 52 week price change
- Dividend yield
- and much much more
When screening for stocks, your investment objective will dictate your search criteria. For example, if you are looking for dividend paying stocks you may chose to screen for low book values or payout ratios rather than purchasing securities based on yield alone.
The more information you have available to plug into the stock screener, the greater the chance that your results will fit into your investment objectives.
Stock screeners can be a great tool for narrowing down the field of potential investments, but should ultimately be viewed as a starting point for investing.
Once potential investments have been identified then you can begin to dig deeper into the security to make sure it is right for your situation and investment goals.
Best Canadian Stock Screeners, And How To Use Them
While there are many stock screeners available for United States securities unfortunately, there is not much in the offering when it comes to free Canadian stock screeners.
The only two Canadian stock screeners that I have found to be of any real use to investors are:
This Canadian stock screener is a popular tool for screening for Canadian securities, but the free version is extremely basic. You are able choose between United States or Canadian stock markets, but this stock screener only affords you the option to screen securities for a few variables such as earnings, book value and dividend yield.
Trade Ideas is a powerful real-time stock screener founded in 2002, and allows you to screen Canadian stocks as well as securities traded on a number of exchanges including NYSE, AMEX, NASDAQ, OTC BB, and Pink Sheets.
How To Use Canadian Stock Screeners
These Canadian stock screeners work in much the same manner as other stock screeners available, where you simply plug in your specific requirements for investing.
For example, if you wanted to find all Canadian stocks traded on the Toronto Stock Exchange (TSX) that were priced over $5, had a market cap of more than 100 million and a P/E ratio of less than 5 you could go to the Globe Investor stock screener and enter 5 in the minimum box for “latest closing price”.
You would enter 100 into the the minimum box for Market Capitalization ($Mil)
And lastly 5 in the maximum box for Price/Earnings per share.
Your screen would look something like this:
You can use the Canadian Stock Screeners for any criteria that suits you and your investment objective. Keep in mind that using a stock screener is only the first step in identifying potential investments, and you should always research every potential investment prior to committing any capital.