O-metrix Score

I discovered a nice tool to filter on every stock you pick. It is important to search for stocks that have following characteristics:

1) low P/E ratio

2) high earnings growth

3) high dividend yields

The O-metrix tool will calculate a ratio based on this formula:

O-Metrix = (Dividend Yield + EPS Growth) / (P/E Ratio) X 5

The higher the O-Metrix score, the better the company. I would pick companies with an O-Metrix score higher than 3.

The tool is free and downloadable here:
O-metrix tool

The O-metrix tool has one Achilles vulnerability and it’s quite a big one too. It doesn’t take in account the Price to Book ratio. It is very risky to buy companies with a high Price to Book ratio as they can fall very hard when their earnings growth plunges.