Halal Stock Screener - AAOIFI Compliance
Screen stocks for Shariah compliance using AAOIFI standards. Check debt ratios, interest income, and business activities to find halal investments.
وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا
"Allah has permitted trade and forbidden interest."
— Surah Al-Baqarah (2:275)
Select a Stock to Screen
These are sample stocks with pre-loaded financial data for demonstration.
AAOIFI Screening Criteria
Financial Ratios (All must be < 33%)
- • Debt Ratio: Total Debt / Market Cap
- • Interest Securities: Interest-bearing investments / Market Cap
- • Receivables: Accounts Receivable / Market Cap
Income Screening (< 5%)
Impermissible income (interest, gambling revenue, etc.) must be less than 5% of total revenue. Any such income must be purified through charity.
Impermissible Business Activities
Companies primarily engaged in these activities are not Shariah-compliant:
Alcohol
Production, distribution, or sale of alcohol
Tobacco
Tobacco products manufacturing
Gambling
Casinos, betting, lottery
Conventional Banking
Interest-based financial services
Conventional Insurance
Non-Takaful insurance
Pork & Non-Halal Food
Pork products or non-halal meat
Adult Entertainment
Pornography and related content
Weapons & Defense
Arms manufacturing (disputed)
Music & Entertainment
Music production (disputed by some scholars)
💡 Tips for Halal Investing
- • Use certified screeners: Services like Zoya, Islamicly, or Wahed screen thousands of stocks.
- • Check regularly: A company's compliance status can change with its financial position.
- • Purify dividends: Donate the impermissible portion of dividends to charity.
- • Consider ETFs: Halal ETFs like SPUS or HLAL are pre-screened for compliance.
- • Consult scholars: When in doubt, seek guidance from qualified Islamic scholars.
Note: This tool provides educational guidance based on AAOIFI standards. Different scholars and organizations may have varying criteria. Always verify with official Shariah boards and certified Islamic finance professionals before investing.
Shariah screening sounds like a single test and is actually two: one for what the company does, and one for how it is financed. A business can be entirely permissible and still fail on its balance sheet, which is why a company you would never expect to be questionable can screen out and a technology firm can screen in. The same two-question discipline — what is it, and what stands behind it — is what our guide to checking whether a product is halal applies to food and cosmetics. The screener above runs both tests; the notes below explain what each one is checking and what to do about the small remainder.
The two screens a stock has to pass
| Screen | What it tests | Common threshold | Why it exists |
|---|---|---|---|
| Business activity | Whether the company's core business is itself permissible — alcohol, gambling, pork, conventional banking and similar are excluded | No material involvement in prohibited activity | You cannot earn from an activity Islam prohibits, however good the returns |
| Financial ratios | Debt, interest-bearing securities and receivables, each measured against market cap; and impermissible income against revenue | Debt / interest securities / receivables each under 33%; impermissible income under 5% | Keeps a permissible business from being financed substantially by interest |
A company has to clear both. Failing the business screen is normally fatal — an alcohol producer is not rescued by a clean balance sheet. Failing a financial ratio can in some methodologies be tolerated if the impermissible income is small enough, which is exactly the case the next section deals with.
Where the numbers come from
The ratios are not invented by app developers; they descend from standards published by AAOIFI, the Accounting and Auditing Organization for Islamic Financial Institutions, whose screening criteria the major Islamic funds, banks and index providers work to. The standards development process is public, which matters for a practical reason: the thresholds are not scripture, they are scholarly and industry consensus, and different index families apply slightly different versions of them. The comparison table further up this page shows where the S&P and Dow Jones Islamic methodologies diverge from AAOIFI — most notably on the receivables ratio.
The practical consequence is that you should pick one methodology and stay with it, rather than switching whenever a stock is borderline. A portfolio screened inconsistently is not screened at all. Compliance is also re-tested periodically — usually quarterly — because ratios move with the share price and the debt on the books.
Dividend purification, worked through
A stock can be halal to hold and still produce a small amount of income you are not entitled to keep. When that happens the remedy is purification: donate the impermissible proportion of the dividend to charity. It is calculated as a percentage of the dividend, not of your whole holding, and it is deliberately not zakat — it is a separate obligation, and paying it does not count towards your zakat.
| Impermissible income | Dividend received | Amount to donate | You keep |
|---|---|---|---|
| 3% | $100 | $3.00 | $97.00 |
| 5% | $100 | $5.00 | $95.00 |
| 1.5% | $1,000 | $15.00 | $985.00 |
Most screening apps publish the purification percentage per holding alongside the compliance verdict, so the arithmetic is done for you; what is left to you is actually paying it. The annual obligation that does count as zakat — on the portfolio's value once a lunar year has passed — is a separate calculation, handled by our zakat calculator.
The sectors people ask about most
| Sector | General position | What can still disqualify it |
|---|---|---|
| Technology | Often permissible, because the underlying business — software, hardware, services — is itself halal | Significant debt or interest income on the balance sheet; status is re-tested and can change |
| Conventional banks and insurers | Generally excluded, because interest is their core business rather than a side effect | Nothing rescues the business screen; this is a structural exclusion |
| Islamic banks and Takaful | May be permissible, since the model is profit-sharing and mutual risk rather than lending at interest | That the specific institution is genuinely operating that way — screen the company, not the label |
| Real estate and REITs | Can be permissible when the property is held without interest-bearing debt | Leverage — the debt ratio is the usual reason a REIT screens out |
The same asset-backed logic runs through the fixed-income side of a portfolio: a sukuk is the halal counterpart to a bond precisely because the investor owns an asset rather than holding a debt claim.
Sources: AAOIFI (aaoifi.com). Screening thresholds are industry consensus and vary between methodologies — the figures above follow the AAOIFI-style criteria most screeners apply. Educational information, not financial or religious advice; consult a qualified scholar for rulings on your own holdings.
Popular Halal Investment Options
📈 Halal ETFs
- SPUS: SP Funds S&P 500 Sharia Industry Exclusions ETF
- HLAL: Wahed FTSE USA Shariah ETF
- SPRE: SP Funds S&P Global REIT Sharia ETF
- UMMA: Wahed Dow Jones Islamic World ETF
ETFs are pre-screened and rebalanced regularly for compliance.
🏠 Real Estate
- • Direct property investment (halal if no mortgage)
- • Halal REITs (must screen for debt levels)
- • Real estate crowdfunding platforms
- • Musharakah-based property investment
Real estate can be halal if structured properly without interest.
📑 Sukuk (Islamic Bonds)
- • Government sukuk (sovereign)
- • Corporate sukuk
- • Sukuk ETFs
- • Green sukuk (sustainable projects)
Sukuk are asset-backed and provide returns without interest.
🌟 Commodities
- • Gold (physical or allocated accounts)
- • Silver and precious metals
- • Agricultural commodities
- • Commodity ETFs (with caveats)
Physical commodities are generally halal; futures trading is disputed.
📱 Popular Stock Screening Apps
Zoya
Comprehensive screening with purification calculator
Islamicly
Real-time screening with portfolio tracking
Musaffa
Global stock screening with detailed reports
Screening Criteria Comparison
| Criteria | AAOIFI | DJIM | S&P Shariah |
|---|---|---|---|
| Debt Ratio | < 33% | < 33% | < 33% |
| Interest Securities | < 33% | < 33% | < 33% |
| Receivables | < 33% | < 49% | < 33% |
| Impermissible Income | < 5% | < 5% | < 5% |
| Denominator | Market Cap | Avg Market Cap | Market Cap |
⚠️ Important Considerations
- • Regular rebalancing: A stock's compliance status can change quarterly. Review your portfolio regularly.
- • Different methodologies: Different scholars and organizations may have varying criteria. Choose one methodology and stick to it.
- • Purification is mandatory: If you hold halal stocks with any impermissible income, you must purify dividends.
- • Options and futures: Most scholars consider these haram due to uncertainty (gharar) and gambling elements.
- • Margin trading: Buying stocks on margin involves interest and is not permissible.
📋 Disclaimer
This tool is for educational purposes only and should not be considered financial advice. Stock screening requires accurate, up-to-date financial data from official company filings. For investment decisions, please consult with certified Islamic finance professionals and use certified halal stock screening services. Shariah compliance is a religious matter - when in doubt, consult qualified scholars.