The Best Dividend Stock Screens

My Favourite Dividend Screens

Finding great businesses isn’t easy. With over a thousand businesses alone listed on the Australian Stock Exchange (and multiples more internationally), finding the diamonds in the rough can be difficult, time-consuming and overwhelming. Today, I’ll show you two quick methods to find companies that in my opinion provide a great starting point to finding dividend stocks that will deliver you attractive long term returns.

Stock Screening – the diamonds in the rough

Stock screening is the process of sorting a list of companies by some financial criteria. By using any number of online tools, we can take a universe of stocks and rank them on this criteria from best to worst. Two of the most commonly used company screens are Price to book value and Price to earnings; these are the two gold standards for screening for “value” stocks. Other common stock screening methods include sorting by market capitalisation (in order to separate smaller companies from larger companies) and growth-focused screens such as screening for return on equity and earnings per share growth rates. An excellent book that describes various stock screens and the subsequent investment results of these screens is “What Works on Wall Street” by James O’Shaughnessy – a true classic in using screening methods to build market beating portfolios.

My favourite Stock Screens.

I have two stock screens that I use to find excellent businesses. The first is filtering by volatility and looking for low volatility stocks. Low volatility stocks have a long history of outperforming market averages – this is known as the low volatility anomaly and has been discussed in a number of academic journals. Low volatility stocks have performed exceptionally well over the last three or so years, and as a result, the amount of investment dollars (particularly in the USA) that has flowed into low volatility products has been extremely high. The demand has been so strong in fact that investment firms have rolled out over 20 different “low-vol” stock funds and exchanged traded funds since the end of 2015! The largest such ETF is  the iShares MSCI USA Minimum Volatility ETF (USMV), which has a whopping US$14.1b invested in it! Unfortunately, there is some evidence that enthusiasm for these products has driven prices for low volatility assets to historical highs, which anecdotally is certainly the case in Australia as well. Nonetheless, this screen can be great for finding business to place on your watchlist, so you are ready to pounce should the price of the company fall to more reasonable levels!


Currently, the lowest volatility quintile of the ASX300 are as follows:

CMWCromwell PropNVTNavitas Limited
TCLTransurban GroupSYDSYD Airport
DUEDuet GroupTAHTABCORP Holdings Ltd
CQRCharter Hall RetailDXSDexus Property Group
BKWBrickworks LimitedBXBBrambles Limited
SCGScentre GrpCBACommonwealth Bank.
GOZGrowthpoint PropertySGRThe Star Ent Grp
AGLAGL Energy Limited.FPHFisher & Paykel H.
TLSTelstra Corporation.RHCRamsay Health Care
SGPStocklandARBARB Corporation.
GPTGPT GroupSKISpark Infrastructure
DLXDuluxgroup LimitedIVCInvoCare Limited
IOFInvesta Office FundAOGAveo Group
ASXASX LimitedABCAdelaide Brighton
CSLCSL LimitedAMPAMP Limited
ASTAusNet Services LtdCCLCoca-Cola Amatil
APAAPA GroupSUNSuncorp Group Ltd
WFDWestfield CorpREAREA Group
WESWesfarmers LimitedIAGInsurance Australia
RMDResMed Inc.SKCSkycity Ent Grp Ltd
BWPBWP TrustBLDBoral Limited
CHCCharter Hall GroupGNCGrainCorp Limited
SCPSCA Property GroupNABNational Aust. Bank
GMGGoodman GroupAMCAmcor Limited
MGRMirvac GroupAHGAutomotive Holdings.
VCXVicinity CentresWBCWestpac Banking Corp
TTSTatts Group LtdTPMTPG Telecom Limited
ABPAbacus Property Grp.SAISAI Global Limited
FBUFletcher BuildingPPTPerpetual Limited
CARCarsales.Com Ltd.HSOHealthscope Limited

Obviously there are a number property trusts in the list, and these require special analysis which I will discuss in the future. Of particular interest in my opinion are industrial stocks; that is, everything other than resources and property trusts. The above list can be a great starting point for further research.

The other screen I love to use is very similar, and often there is a large percentage of overlap between the two. The next screen I use is a low-beta screen. Beta is a finance term which is reasonably technical, but a basic explanation is that a company with a beta less than 1 is less volatile than the broader market. Therefore, we again look for low betas as potential interesting opportunities. The top 60 of this screen are below as well.

RMDResMed Inc.SGPStockland
SKCSkycity Ent Grp LtdFBUFletcher Building
FPHFisher & Paykel H.SCGScentre Grp
ACXAconex LimitedTPMTPG Telecom Limited
DUEDuet GroupWFDWestfield Corp
IPHIPH LimitedAZJAurizon Holdings Ltd
SPKSpark New ZealandJBHJB Hi-Fi Limited
TMETrade Me GroupASTAusNet Services Ltd
PRGProgrammedAHYAsaleo Care Limited
GOZGrowthpoint PropertySYDSYD Airport
GNCGrainCorp LimitedTLSTelstra Corporation.
TCLTransurban GroupCCLCoca-Cola Amatil
APOApn Outdoor GrpSGRThe Star Ent Grp
SKISpark InfrastructurePGHPact Group Hldgs Ltd
BKWBrickworks LimitedGTYGateway Lifestyle
CMWCromwell PropDLXDuluxgroup Limited
CCPCredit Corp GroupMGRMirvac Group
ANNAnsell LimitedVOCVocus Comms Ltd
APIAustralian Pharm.PRYPrimary Health Care
ECXEclipx Group LtdCOHCochlear Limited
SAISAI Global LimitedCVOCover-More Grp Ltd
IOFInvesta Office FundBWPBWP Trust
HSOHealthscope LimitedCPUComputershare Ltd
TAHTABCORP Holdings LtdSCPSCA Property Group
ALUAltium LimitedGPTGPT Group
AGLAGL Energy Limited.SHLSonic Healthcare
CARCarsales.Com Ltd.MQAMacq Atlas Roads Grp
QANQantas AirwaysSKTSky Network
CQRCharter Hall RetailEHEEstia Health Ltd
CSLCSL LimitedNSRNational Storage

As you can see, there is some overlap between the two. Again, these can be great places to find quality companies with the potential to pay strong and growing dividend streams.

Why not just use Dividend Screens?

The reason I start with other screens is that I am far more interested in owning businesses with strong financial characteristics and strong prospects than companies with the largest yields. As I have written about before, stocks with lower than average volatility and low betas have historically performed well. My concern with screening by yield is that it can result in a list of companies with extremely high yields but impaired business outlooks. While I am primarily looking for dividend growth companies, I would prefer companies with slightly lower yields but with the ability to grow those yields over time.

Stock Screening Warnings.

Stock screens are great for coming up with a list of companies deserving of further investigation. I implore you not to just use the top 10% or top 20% as a portfolio. Blind buying of companies rarely works out for individual investors. Again, I would suggest you use these screens as a starting point for further research.

In addition, stock screens only screen for quantitative factors. Other factors, such as the quality of the management team and the outlook for the broader industry cannot be screened for (at least, as far as I am aware). These qualitative factors are an important part of the investment research process.

Lastly, when using stock screeners you should make the effort to understand where the data is coming from and how relevant it is. Fortunately, I have access to some institutional level tools which enables me to be confident in both the quality and timeliness of my data. Make sure the tools you use are up to date and accurate!


Stock screens can enable an investor to quickly and efficiently find quality companies deserving of further investigation. I would encourage everyone to explore stock screening as a valuable way to find new investment ideas. For those of you who are concerned about data issues, I update my screens quarterly, and you can find them here. As I said, these are the primary way that I find new and interesting companies for further research.

Do you use stock screening? What are you favourite stock screens? Let me know in the comments!