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Beginner Investors: A Helpful Tip to Personalize Your Portfolio

Nowadays, there are so many stocks, ETFs, and different options for investors to choose. And while choice is always good, it can be overwhelming trying to find something specific or sorting through hundreds of securities.

It is possible, however, to find ideal stocks based on specific variables, whether it be a target dividend yield range or a certain market cap range. It may be companies in a certain sector or companies that have met minimum growth metrics.

Whatever it is you are looking for, the best way to sort through the large number of stocks is through a stock screener.

Stock screeners are a great tool for many of the reasons mentioned. You can create your own or find plenty of great ones online. Naturally, many sites back test your screener for you, which shows you how it would have done over time if you invested equally across all the stocks the screener retained. This is helpful to show you if you need to tweak some variables.

How it works

The way it works is you choose from the huge number of variables, whatever is most important to you. Once you’ve selected your few variables, you pick the range of each, and then the screener will show you how many securities meet the criteria. If you have a large number of matches, you may want to add more variables to help narrow down the selection.

Conversely, if you have a small number of matches or no matches, you may have been too picky, and you may need to get rid of a few variables or make the ranges of the variables larger.


If you were to look up stocks (at the close of trading on July 30) with market caps between $750 million and $5.5 billion on any Canadian exchange, you would come up with more than 200 results. To narrow down the number, you would have to add another field, such as dividends that yield more than 3.5%. Including this would reduce your total results to just 70.

Adding another field such as P/E ratios between 10 and 20 would yield you 26 results. One more field, such as debt to equity between 0.3 and 1.0, would bring you down to 13 results.

Now you can assess each stock individually and determine if you like what you see, or maybe you want to go back and tweak your screener a few more times. You may just want to tweak the ranges of your existing fields or you may need to make bigger changes by adding and subtracting different fields.

One stock that the above screener would have let you know about is Canadian Western Bank (TSX:CWB). Canadian Western has a market cap of roughly $2.6 billion, a trailing 12-month price to earnings of 10.3, a dividend yield of 3.6%, and debt to equity of 0.77.

By sorting through the screener, I now know that Canadian Western Bank pays a decent dividend, is well valued, and has a sustainable debt to equity.

Of course, the stock screener doesn’t tell you everything, there is plenty of research still to be done, but it does point investors in the right direction, thus reducing time spent narrowing down the securities and increasing the time available to further research them.

Another idea would be to make multiple screeners, maybe one for income stocks, one for growth stocks, and one for value stocks. All three should be included in your portfolio, but each type of company will have very different metrics. A growth stock may not have positive earnings yet, where a value stock would have a reasonably low P/E ratio.

Bottom line

Because there is so much flexibility, you decide which parametres you want to include. Everyone’s will be different, and you can find other great screeners online to see the companies that match those, or tweak them slightly to match your individual preferences more.

Stay hungry. Stay Foolish.

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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned.

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