Stock screeners can be wonderful tools to use for traders who want to find exactly the right stock that matches the right investment criteria (like price, P/E ratio, volume, industry, dividend yield, etc). Virtually every major online brokerage offers stock screeners, as do most finance websites and even stock exchanges. I highly recommend taking advantage of them.
If you are interested in Canadian stocks, then Canadian stock screeners are probably right up your alley. They are especially useful for non-Canadian investors who probably aren’t very familiar with the gamut of Canadian stocks available off the top of their head.
I’ll give you an overview of Canadian stock screeners, explain how to find them, give tips on making the most of these handy tools for trading, and recommend the ones I think are most useful.
What are Canadian Stock Screeners – and Where Can I Find One?
Stock screeners, as we discussed, are pretty standard across the industry. You can get a stock screener for free, or you can pay for a screener with extra features. Some premium tools, for example, give you access to real-time quotes that normally cost money and can only be found on premium stock trading platforms.
If you are merely looking for basic info to narrow down the thousands of stocks out there – the Toronto Stock Exchange (TSX) alone has 1,500 – a free stock screener will work wonders. If you want a little more, you’ll probably have to pay for a premium service, but that is a small investment compared to the capability it gives you.
Canadian stock screeners are pretty useful because Canada, like the United States and a few other countries, has several stock exchanges. The main exchange by far is the Toronto Stock Exchange. There is also an exchange for smaller, emerging companies that are too small for the Toronto exchange; this is called the TSX Venture Exchange (TSXV) and it lists over 2,000 companies with a market capitalization usually north of $60 billion.
Between the two, you can choose from over 3,500 stocks across a wide variety of sectors and industries that vary significantly in size and value. The Toronto Stock Exchange has the distinction of having the greatest number of companies in the mining and oil & gas industries in any exchange across the globe, which isn’t surprising given how big of a percentage of Canada’s economy those industries form.
The first place to find a Canadian stock screener is your brokerage platform. For starters, make sure you can even trade Canadian stocks through your broker. If you can, they may have a screener built into the platform, and maybe even integrated with other key features (like quotes, charts, and financial data) that make studying stocks easy.
If that’s not the case, you can try a few free screeners. One popular screener is the one offered by TMX Money. I like this screener because it gives you a solid base of criteria – allowing you to sort by sector, exchange, share price, market cap, earnings per share, annual income growth, institutional holdings, and other key metrics – while also giving you access to all Canadian exchanges. You can also sort by dividend rate, yield, and average if you’re looking for a solid dividend-paying income stock, and make use of advanced metrics like EBITDA margin, 50 and 200-day moving averages, and post-tax profit margin for continued operations.
For paid screeners, turn to market analysis companies, who usually have basic screeners beefed up with premium options like stock recommendations, rankings, and other nice features. The screener offered by Zacks Investment Research is a good example. You can pay extra for Zacks’ professional analysis of Canadian stocks to go along with a robust slate of options. ChartSmart also offers screening and charting software for Canadian stocks; it is a paid service but does come with a 10-day free trial.
Using the Screener to Your Advantage
I always tell people that the number one rule of using stock screeners is to actually know the fundamentals of the market you’re trying to enter. Canadian markets can be different animals than American, British, or European markets primarily because the sector/industry composition is different. As a result, economic forces impact Canadian markets in a way that may be different from their impact on American markets, and vice-versa.
By understanding the core fundamentals of a certain market, you know which criteria are important for your particular market. Canadian markets are awash in tech companies and those involved in natural resources. The P/E ratio for these industries, for example, will be dramatically different (much higher with oil companies than with electronics companies, for example). Avoid comparing apples to oranges with your screener and you’ll be able to more accurately pull the stocks you want.
Also, avoid being too specific. You may want a stock that has a certain amount of variables, and that’s fine, but being too specific means you are narrowing your trading range to only one or two stocks at a time – which greatly increases your risk and exposure to downturns and losses.