{"id":277,"date":"2019-11-09T19:48:55","date_gmt":"2019-11-09T19:48:55","guid":{"rendered":"https:\/\/codesupply.co\/nisi-dolor-etiam-eleifend-pretium-libero-quis-amet-nam-vel-a-consequat-penatibus\/"},"modified":"2019-11-09T19:48:55","modified_gmt":"2019-11-09T19:48:55","slug":"nisi-dolor-etiam-eleifend-pretium-libero-quis-amet-nam-vel-a-consequat-penatibus","status":"publish","type":"post","link":"https:\/\/sapientconsultant.in\/?p=277","title":{"rendered":"How to Screen for Halal Stocks: Manual Method + Apps\/Tools"},"content":{"rendered":"\n

For Muslims looking to grow their wealth while staying true to their faith, investing in halal stocks<\/strong> is a crucial consideration. But how can you be sure a stock is Shariah-compliant<\/em>? What defines a stock as Shariah-compliant or Shariah-Non compliant<\/em>?<\/p>\n\n\n\n

This article will walk you through two ways to screen stocks for halal compliance: manually using Islamic financial principles<\/strong>, and using dedicated screening apps\/tools<\/strong> that simplify the process.<\/p>\n\n\n\n

\n\n\n\n

\ud83d\udccc What Makes a Stock Halal?<\/strong><\/p>\n\n\n\n

Before we dive into screening methods, let\u2019s quickly outline the two main criteria used to determine if a stock is halal:<\/p>\n\n\n\n

    \n
  1. Business Activity Screening<\/strong> \u2013 The company must operate in a permissible (halal) industry. Activities involving alcohol, gambling, mixed businesses, conventional banking, pork, adult entertainment, or weapons are strictly haram.<\/li>\n\n\n\n
  2. Financial Ratio Screening<\/strong> \u2013 Even if a business is halal, its financial dealings must also comply with Shariah. This typically involves limits on:\n
      \n
    • Debt<\/strong>: Interest-bearing debt must be below a specific threshold (e.g., 30% of market cap or total assets).<\/li>\n\n\n\n
    • Interest Income<\/strong>: Non-operating interest income must be minimal.<\/li>\n\n\n\n
    • Liquidity Ratios<\/strong>: Some scholars apply rules to cash and receivables.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n
      \n\n\n\n

      \ud83d\udd0d Method 1: Manual Screening (DIY Approach)<\/strong><\/p>\n\n\n\n

      For those who want to dig deeper, here\u2019s a simplified process to manually screen a stock for halal compliance:<\/p>\n\n\n\n

      Step 1: Check the Business Sector<\/strong><\/p>\n\n\n\n

        \n
      • Visit the company\u2019s website or financial sites like Yahoo Finance or Google Finance.<\/li>\n\n\n\n
      • Read its description and revenue sources.<\/li>\n\n\n\n
      • Eliminate stocks involved in haram sectors<\/strong> (alcohol, gambling, interest-based finance, pork, etc.).<\/li>\n<\/ul>\n\n\n\n

        Step 2: Analyze Financial Ratios<\/strong><\/p>\n\n\n\n

        You can get this information from the company\u2019s annual report or financial data platforms.<\/p>\n\n\n\n

        Apply common Shariah screening criteria:<\/p>\n\n\n\n

          \n
        • Debt to total assets or market cap < 30%<\/strong><\/li>\n\n\n\n
        • Cash + interest-bearing securities < 33%<\/strong><\/li>\n\n\n\n
        • Interest income < 5% of total revenue<\/strong><\/li>\n<\/ul>\n\n\n\n

          These benchmarks may vary slightly based on the scholar board or screening standard used (AAOIFI, DJIM, MSCI Islamic, etc.).<\/p>\n\n\n\n

          Step 3: Purify Non-Compliant Income<\/strong><\/p>\n\n\n\n

          If the company has a small portion of non-compliant income (e.g., interest), calculate your share and donate it to charity. This process is called purification or purging.<\/strong><\/p>\n\n\n\n

          \n\n\n\n

          \ud83d\udcf1 Method 2: Using Apps and Screening Tools<\/strong><\/p>\n\n\n\n

          For those who prefer ease and automation, many tools and platforms help screen halal stocks in seconds. Here are some popular ones:<\/p>\n\n\n\n

          1. Musaffa App<\/strong><\/p>\n\n\n\n

            \n
          • User-friendly app for global halal stock screening.<\/li>\n\n\n\n
          • Covers U.S., Canada, India and many other countries.<\/li>\n\n\n\n
          • Offers stock breakdowns and a \u201cpurify\u201d calculator.<\/li>\n\n\n\n
          • Available on iOS and Android.<\/li>\n<\/ul>\n\n\n\n

            2. Islamicly<\/strong><\/p>\n\n\n\n

              \n
            • Real-time Shariah compliance status for global stocks.<\/li>\n\n\n\n
            • Backed by qualified Shariah scholars.<\/li>\n\n\n\n
            • Includes portfolio tracking and alerts.<\/li>\n\n\n\n
            • Paid and free versions available.<\/li>\n<\/ul>\n\n\n\n

              3. Islamic Stock  (Shariah Stock Screener) For Indian Markets only.<\/strong><\/p>\n\n\n\n

              Screening & Purging \u00a0services are free of cost.<\/p>\n\n\n\n

              More suitable for individual investors.<\/p>\n\n\n\n

              Offers compliance reports in premium version.<\/p>\n\n\n\n

              <\/p>\n\n\n\n

              Bonus Tips<\/strong><\/p>\n\n\n\n

              Combine both approaches<\/strong>\u2014use tools for convenience, and manual checks for added confidence.<\/p>\n\n\n\n

              Follow a certified Shariah board or scholar<\/strong> for up-to-date guidelines.<\/p>\n\n\n\n

              Recheck compliance periodically<\/strong>, as companies can shift their activities or financial structure.<\/p>\n\n\n\n

              Investing in halal stocks is not just about profits\u2014it\u2019s about aligning your wealth-building journey with your faith. Thanks to a growing ecosystem of tools and increased financial awareness, screening for halal investments has never been easier.<\/p>\n\n\n\n

              Whether you’re a seasoned investor or just starting out, take the time to ensure your portfolio reflects your principles. After all, barakah (divine blessing)<\/strong> comes not just from how much you earn, but how purely you earn it.<\/p>\n\n\n\n\n\n\n\n

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                For Muslims looking to grow their wealth while staying true to their faith, investing in halal stocks is a crucial consideration. But how can you be sure a stock is Shariah-compliant? What defines a stock as Shariah-compliant or Shariah-Non compliant? This article will walk you through two ways to screen stocks for halal compliance: manually […]<\/p>\n","protected":false},"author":1,"featured_media":169,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-277","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-overview"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=\/wp\/v2\/posts\/277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=277"}],"version-history":[{"count":0,"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=\/wp\/v2\/posts\/277\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=\/wp\/v2\/media\/169"}],"wp:attachment":[{"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sapientconsultant.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}