How to Set Up Custom Stock Screeners in Fidelity and Charles Schwab for Value Investing

You'll learn to build automated stock screeners that identify undervalued companies using Warren Buffett's proven criteria, saving hours of manual research each week. This complete setup takes about 45 minutes and works with both major brokerages.

What You'll Need

• Active Fidelity or Charles Schwab brokerage account (both offer free screening tools)
• Basic understanding of financial ratios like P/E and debt-to-equity
• Email address for automated alerts
• 15-20 minutes for initial setup, 5 minutes for customization

Time estimate: 30-45 minutes total

Difficulty: Beginner to Intermediate

Step-by-Step Instructions

Step 1: Access Your Brokerage Research Platform

Log into your Fidelity account and navigate to Research & Ideas in the top menu bar. For Charles Schwab users, click Research then select Stocks from the dropdown menu. Both platforms require you to accept research disclaimers on first use.

These research platforms are free with any brokerage account and provide institutional-grade screening tools. Fidelity's screener processes data on over 8,000 stocks while Schwab covers more than 6,500 securities with real-time updates throughout market hours.

Step 2: Navigate to the Stock Screener Tool

In Fidelity, click Stocks under the Research section, then select Stock Screener from the left sidebar. Schwab users should look for Stock Screener under the Research tab or search for "screener" in the platform's search box.

Both platforms offer preset screens, but we'll build a custom value investing filter from scratch. Click Create New Screen or Custom Screen to start with a blank template that gives you complete control over the criteria.

Step 3: Set P/E Ratio Filters Under 15

Click Add Criteria and search for "Price to Earnings" or "P/E Ratio." Set the filter to Less Than 15.0 using the dropdown menu. This classic value investing metric identifies companies trading below historical market averages.

A P/E ratio under 15 suggests the stock may be undervalued compared to its earnings power. According to SEC investor guidance, this ratio helps investors compare companies within the same industry and identify potential bargains in the market.

Step 4: Add Debt-to-Equity Constraints

Search for Debt to Equity Ratio in the criteria list and set it to Less Than 0.5. This ensures you're screening for companies with conservative capital structures and strong balance sheets.

Companies with debt-to-equity ratios below 0.5 typically have less financial risk during economic downturns. This filter eliminates highly leveraged companies that might struggle with debt payments during market stress, following Benjamin Graham's emphasis on financial stability.

Step 5: Filter for Dividend Yield Minimums

Add Dividend Yield as a criterion and set the minimum to 2.0%. This identifies companies that return cash to shareholders while potentially providing income during market volatility.

A 2% dividend yield threshold eliminates non-dividend paying growth stocks and focuses on established companies with consistent cash generation. This criterion aligns with value investing principles that prioritize current income alongside capital appreciation potential.

Step 6: Set Market Cap Requirements

Add Market Capitalization to your screen and set the minimum to $1 billion. This focuses your search on mid-cap and large-cap companies with sufficient liquidity and analyst coverage.

The $1 billion minimum eliminates micro-cap stocks that often lack institutional research coverage and may have higher volatility. Both Fidelity and Schwab allow you to adjust this range, but value investors typically prefer companies with proven business models and stable operations.

Step 7: Add Revenue Growth Stability

Search for Revenue Growth or Sales Growth and set a range between -5% and +25% for the trailing twelve months. This eliminates both declining businesses and potentially overheated growth stocks.

This range captures companies with steady, sustainable growth without the premium valuations that often accompany high-flying growth stocks. It also allows for slight revenue declines that might create temporary value opportunities.

Step 8: Set Return on Equity Minimums

Add Return on Equity (ROE) with a minimum threshold of 10%. This measures how effectively management uses shareholder equity to generate profits.

ROE above 10% indicates efficient capital allocation and strong management execution. Combined with your other filters, this ensures you're screening for profitable companies that generate solid returns on invested capital rather than just cheap stocks.

Step 9: Save Your Custom Screen

Click Save Screen and name it "Value Investment Screen" or similar. Both platforms allow you to save multiple custom screens and access them from your account dashboard.

Saving your screen preserves all criteria settings and makes it easy to run the same analysis weekly. You can create variations by copying this screen and adjusting individual parameters for different market conditions or investment strategies.

Step 10: Schedule Weekly Email Alerts

Look for Alert or Email Notification options near the Save button. Set up weekly email delivery every Sunday evening to review results before the market opens Monday.

Email alerts ensure you never miss potential opportunities and maintain consistent screening discipline. Both platforms send HTML-formatted emails with clickable stock symbols and key metrics, making it easy to research candidates from your inbox.

Troubleshooting

No results appearing: Your criteria may be too restrictive. Try increasing the P/E ratio to 20 or reducing the dividend yield requirement to 1.5% to see if stocks appear. Market conditions significantly impact how many companies meet value criteria.

Email alerts not arriving: Check your spam folder and add your brokerage's domain to your email whitelist. Fidelity emails come from @fidelity.com while Schwab uses @schwab.com addresses.

Screen running too slowly: Large screens with many criteria can take 30-60 seconds to process. Both platforms timeout after 2 minutes, so consider running screens during off-peak hours or simplifying complex multi-criteria searches.

Expert Tips

• Pro tip: Save multiple screen variations with different P/E thresholds (under 10, under 15, under 20) to adjust for market cycles and valuation environments.
• Run screens on Sunday evenings when weekend news has been digested but before Monday's opening volatility affects prices.
• Export results to Excel using the Download button for deeper analysis and record-keeping of historical screening results.
• Set up separate screens for different sectors since technology companies naturally have higher P/E ratios than utilities or industrials.
• Use the Back-test feature in Schwab's platform to see how your screening criteria would have performed over the past 1-3 years.

Advanced Screening Strategies

Once you've mastered basic value screens, consider adding Free Cash Flow Yield above 5% to identify companies generating substantial cash relative to their market value. This metric often reveals value opportunities that P/E ratios might miss, especially in capital-intensive industries.

Professional investors frequently combine multiple valuation metrics to reduce false positives. As detailed in our analysis of contrarian investment psychology, successful value investors often screen for companies trading below intrinsic value using multiple confirmation criteria.

Consider adding Price-to-Book ratio filters under 2.0 for an additional value confirmation. This works particularly well for asset-heavy industries like real estate, utilities, and manufacturing where book value provides meaningful insight into company worth.

What to Do Next

After setting up your automated screens, develop a systematic process for researching the companies that appear in your weekly alerts. Create a simple spreadsheet to track screening results over time and identify patterns in market opportunities.

Consider expanding your screening capabilities by learning to build automated monitoring systems. Our tutorial on building Federal Reserve impact trackers shows how to combine economic data with stock screening for more sophisticated investment analysis.