VALUE STOCK

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Here’s a practical, data-driven checklist to screen for value stocks, designed to help you identify undervalued companies with strong fundamentals, consistent income, and long-term resilience.

✅ VALUE STOCK SCREENING CHECKLIST

Use this list when building a screener or manually analyzing stocks.

🔹 1. Low Price-to-Earnings (P/E) Ratio

  • 📌 Target: < 15

  • 🧠 Why: Indicates the stock is cheap relative to its earnings

  • 🔍 Screener: P/E Ratio < 15

🔹 2. Low Price-to-Book (P/B) Ratio

  • 📌 Target: < 1.5

  • 🧠 Why: Measures how cheap the stock is compared to the company’s assets

  • 🔍 Screener: P/B Ratio < 1.5

🔹 3. PEG Ratio (P/E to Growth)

  • 📌 Target: < 1.0

  • 🧠 Why: Adjusts for growth — a low PEG signals undervalued even when accounting for growth

  • 🔍 Screener: PEG Ratio < 1

🔹 4. Consistent Dividend Payout

  • 📌 Target: Yield > 3%, Payout Ratio < 60%

  • 🧠 Why: Reliable income + sustainability

  • 🔍 Screener:

    • Dividend Yield > 3

    • Payout Ratio < 60

🔹 5. Strong Return on Equity (ROE)

  • 📌 Target: > 10%

  • 🧠 Why: Company efficiently generates profits from shareholder equity

  • 🔍 Screener: ROE > 10

🔹 6. Solid Free Cash Flow

  • 📌 Target: Positive and growing FCF

  • 🧠 Why: Shows real profitability and financial health

  • 🔍 Screener: Free Cash Flow > 0

🔹 7. Manageable Debt Load

  • 📌 Target: Debt-to-Equity < 1.0

  • 🧠 Why: Lower debt reduces risk in downturns

  • 🔍 Screener: Debt/Equity < 1

🔹 8. Stable or Increasing Revenue

  • 📌 Target: Revenue growth over the last 3–5 years

  • 🧠 Why: Even value stocks need to show consistent operations

  • 🔍 Screener: 5-Year Revenue Growth > 5%

🔹 9. Insider & Institutional Ownership

  • 📌 Target: Insider > 2%, Institutional > 50%

  • 🧠 Why: Shows confidence from executives and large funds

  • 🔍 Screener: Add via Finviz Elite or Seeking Alpha

🔹 10. Sector Tailwinds

  • 📌 Goal: Favor sectors like utilities, consumer staples, energy, healthcare, banks during inflationary or late-cycle markets

  • 🧠 Why: Value stocks often cluster in defensive or cyclical sectors

🔧 Where to Run This Screen

PlatformStrength
Finviz EliteFast filters, great for beginners
TradingViewCustom technical + fundamental combo
Seeking AlphaDeep financials + valuation grades
Simply Wall StVisual reports on valuation & FCF
ZacksValue rankings, screen by growth/value blend

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