value-dividend-screener

---
name: value-dividend-screener
description: Use when the user requests dividend stock screening, income-portfolio ideas, or quality value stocks: P/E under 20, P/B under 2, yield 3%+, consistent 3-year dividend and EPS growth.
category: Screening
version: 1.0.0
tools: []
---

# Value Dividend Screener

Identify high-quality dividend stocks that combine value characteristics, attractive income, and consistent growth, using a two-stage screening methodology.

**Two-stage approach:**
1. **FINVIZ pre-screening (recommended)** — basic criteria applied first, fast and efficient
2. **Financial Modeling Prep (FMP) detailed analysis** — deep fundamental analysis of the surviving candidates

Screen US equities on valuation ratios, dividend metrics, financial health, and profitability, then produce a ranked report with composite quality scores and detailed fundamental analysis.

**Efficiency advantage:** FINVIZ pre-screening narrows the field before the detailed pass, cutting the number of FMP lookups needed by roughly 90% — useful when API usage is limited.

## When to Use

Invoke this methodology when the user asks to:
- Find high-quality dividend stocks or income-portfolio ideas
- Screen for value dividend opportunities or sustainable high-yield stocks
- Show stocks with strong dividend growth
- Combine dividend yield, valuation, and fundamental analysis in one screen

## Methodology

### Stage 1 — FINVIZ pre-screening criteria
- Market cap: mid-cap or higher
- Dividend yield: 3%+
- Dividend growth (3-year): 5%+
- EPS growth (3-year): positive
- P/B ratio: under 2
- P/E ratio: under 20
- Sales growth (3-year): positive
- Geography: USA

This typically narrows the universe to 20-50 candidates for detailed analysis.

### Stage 2 — FMP detailed analysis
For each candidate, compute:
- Dividend growth rate (3-year CAGR)
- Revenue and EPS trend analysis
- Dividend sustainability: **Payout Ratio** and **FCF Payout Ratio** (free-cash-flow coverage of the dividend)
- Financial health: debt-to-equity and **Current Ratio**
- **Quality Score**: derived from ROE and profit margins
- **Composite Score**: overall ranking from the **Composite Scoring System** — a weighted 0-100 blend of value, growth, sustainability, and quality that ranks candidates against each other

### Alternative: FMP-only screening (Original Method)

When a FINVIZ Elite subscription isn't available, screen using FMP alone: apply the same dividend yield (3%+), P/E (under 20), and P/B (under 2) filters directly against the full FMP screener, then run the same detailed analysis on every survivor. This analyzes a much larger candidate pool (100-300 stocks vs. 20-50) and costs far more API calls, but needs no second data source.

## Producing the Report

Return findings as a structured chat report, not a file:

1. **Screening criteria summary** — the thresholds applied (yield ≥3.5%, P/E ≤20, P/B ≤2, 3-year dividend CAGR ≥5%, positive revenue/EPS trends) and total candidates found
2. **Ranked table** — Rank, Symbol, Company, Yield, P/E, Dividend Growth, Composite Score
3. **Per-stock detail** for the top names — sector, market cap, valuation metrics, 3-year growth profile, dividend sustainability (Payout Ratio, FCF Payout Ratio, sustainable/monitor/at-risk status), financial health (debt-to-equity, Current Ratio), quality metrics (ROE, margin, Quality Score), and 2-3 investment considerations
4. **Portfolio construction guidance** — sector diversification of the results, suggested allocation approach, and concentration-risk warnings
5. **Monitoring guidance** — which metrics to re-check quarterly and what would trigger rebalancing

## Explaining the Methodology

When presenting results, be ready to explain the reasoning behind it:
- Why these specific thresholds (yield floor, P/E and P/B ceilings) filter for value without excluding quality
- Why dividend *growth* matters more than a high static yield — a rising payout signals durable earnings power, while an unusually high yield often signals distress
- How the Composite Score balances value, growth, sustainability, and quality so no single factor dominates the ranking
- The distinction between dividend sustainability and a "dividend trap" (high yield propped up by an unsustainable Payout Ratio or weak FCF Payout Ratio)
- Why financial health metrics (debt-to-equity, Current Ratio) matter even for dividend-focused screens — over-leveraged companies cut dividends first in a downturn

## Answering Follow-Up Questions

**"Why didn't [stock] make the list?"** — Identify which specific criterion it failed (yield, valuation, growth, or sustainability) and state it plainly.

**"Can you screen a specific sector?"** — Re-run the methodology restricting candidates to the requested sector(s) before ranking.

**"What if I want a higher/lower yield threshold?"** — Explain the trade-off (higher yield thresholds skew toward higher-risk, slower-growth names) and re-screen with the adjusted threshold.

**"How often should this be re-run?"** — Quarterly, aligned with earnings cycles; semi-annually is sufficient for long-term holders; re-run sooner after major market moves.

**"How many stocks should I hold?"** — Minimum 10-15 positions for diversification in a dividend portfolio, balanced across sectors, sized by individual risk tolerance.

## Customizing the Screen

- **Adjusting thresholds** — yield minimum, P/E maximum, P/B maximum, and minimum market cap (e.g., $2B floor) can all be tightened or loosened; explain how each change shifts the candidate pool
- **Sector filtering** — restrict candidates to specific sectors (e.g., Consumer Defensive, Utilities, Healthcare) when the user wants concentrated exposure
- **Excluding REITs and Financials** — these sectors carry structurally different dividend characteristics (higher mandated payouts, different leverage norms) and are often excluded from general dividend-quality screens
- **Sharing results** — present the full ranked table in chat markdown so the user can copy it directly into a spreadsheet; do not offer to write files

## Data Notes and Limitations

- FMP's free tier is rate-limited (roughly 250 requests/day) — the two-stage approach exists specifically to stay within that budget
- Handle missing or stale data gracefully; flag any stock where key metrics are unavailable rather than silently omitting it
- For any figure the user pushes back on, note that fundamentals data can lag and recommend verifying against the company's latest filing
- If FINVIZ access isn't available, fall back to the FMP-only path (Original Method) automatically rather than blocking on it — flag that results will take longer and cover a wider candidate pool
- When the underlying data source returns no matches, loosen one criterion at a time (yield floor first, then P/E ceiling) and tell the user which threshold was relaxed and why, rather than returning an empty report

## Interpreting Sector Concentration

If the resulting list skews heavily toward one or two sectors (commonly Utilities, Consumer Defensive, or Financials, given their structurally higher dividend payouts), call this out explicitly in the portfolio construction guidance. A screen that is quantitatively correct can still produce a portfolio with unintentional sector concentration risk — flag it even when every individual stock passes the criteria cleanly, and suggest capping any single sector at roughly 25-30% of the income-focused portion of the portfolio.