Halal stock screener: how to check if a stock is Shariah-compliant

A stock is generally considered halal when the company's core business is permissible and its finances don't rely heavily on interest. Here's how that screening works, and how to check any US stock on your iPhone.

Updated October 2026 · 6 min read

Test 1: what the company does

The first and most important test is the company's core business. If the main business is prohibited, the stock fails, however good its finances look. Businesses that commonly fail this test include:

• Conventional banking, lending and credit: income built on interest (riba).
• Conventional insurance: interest and excessive uncertainty (gharar).
• Brokerages and investment firms that earn a large share of their revenue from interest.
• Alcohol, tobacco and pork production or distribution.
• Gambling, casinos and lotteries.
• Adult entertainment and cannabis.

Most technology, healthcare, industrial and consumer companies pass this test because what they sell is permissible.

Test 2: how the company is financed

A permissible business can still be a problem if it carries a lot of interest-bearing debt. The most widely used rule of thumb is that interest-bearing debt should be less than about one-third (33%) of the company's market value. Some screening standards set the limit at 30%, and some measure against total assets instead of market value, so two screeners can disagree on borderline companies.

Many standards also look at how much cash and interest-bearing investments the company holds, and how much of its income comes from interest. Because a company's debt and share price change every quarter, a stock that passes today can fail later, and the other way round.

Companies with a small prohibited share

Some permissible businesses earn a small part of their revenue from something prohibited, for example a supermarket chain that also sells alcohol and tobacco. Many scholars allow holding these stocks as long as the prohibited share of income is small, usually given as under about 5%, and the investor purifies that portion of any dividends by giving it to charity. Others avoid them altogether, which is why these companies are usually labelled "questionable" rather than a clear pass or fail.

How the StockBuddy AI halal screener works

In the StockBuddy AI app you search any US stock by name or ticker and get one of three results:

Behind the result, the screener works in three layers:

1. A reviewed list of widely held stocks, based on common screening consensus, for an instant answer.
2. A business-sector check that flags companies in prohibited industries, such as banks, insurers, alcohol, tobacco and gambling.
3. An AI assessment for every other stock, using the company's description and financial figures, including its debt compared with its market value. When a ratio can't be calculated, the result says so instead of assuming the stock passes.

Every result comes with a short explanation, so you can see why a stock passed, failed or needs a closer look.

What a screener can't tell you

A screener is a fast first filter, not a religious ruling. Scholars and screening standards differ on thresholds and on grey-area businesses, and company finances change every quarter. For important decisions, confirm the result against the company's latest financial reports or ask a qualified scholar.

StockBuddy AI provides automated screening guidance for education only. It is not a fatwa or religious ruling, and it is not financial advice.