US Shariah-compliant Stocks: How to Choose a Reliable Investment Option?

Do you have questions about the possibility of investing in the US market in a way that complies with your religious teachings? The truth is that thousands of Muslims today choose US Sharia-compliant stocks as a safe and reliable investment path, especially with the availability of modern tools that facilitate screening and monitoring.

The real problem is not the lack of halal investment opportunities, but rather knowing how to distinguish them from non-compliant options. The US market is very large, and the listed companies are highly diverse, making the selection process require a precise understanding of Islamic principles.

The Five Mistakes to Avoid Before Starting

Before diving into details, let’s clarify common mistakes made by beginner investors:

First Mistake: Ignoring Shariah Advice
Many assume that buying a share of a seemingly “clean” company automatically makes it halal. This is a completely false assumption. Advice from specialized Islamic scholars is not a luxury but an essential necessity.

Second Mistake: Chasing High Returns Only
Focusing solely on high profit margins without verifying their sources can lead you directly into forbidden sectors such as those relying on riba (interest) or unethical activities.

Third Mistake: Blind Trust in Islamic Labels
Not every product bearing the “Islamic” or “Sharia-compliant” label deserves your trust. Some hide behind complex financial structures involving income from forbidden sources.

Fourth Mistake: Lack of Regular Monitoring
A stock that was halal in the past may no longer be. Changes in the company’s financial structure or income sources happen quickly, especially in the US market.

Fifth Mistake: Assuming All Technology Is Halal
The tech sector appears clean on the surface, but some companies depend on massive riba-based loans or invest their funds in riba-bearing accounts.

Understanding the Basics of Islamic Investment Principles

Investing in US Sharia-compliant stocks is based on an integrated system of principles. Let’s review them practically:

Prohibition of Riba and Interest

Riba is the primary evil to avoid. In modern investment, riba is not limited to traditional loans but includes any interest received from usurious bank accounts or deposits that generate financial returns without real risk.

The Principle of Avoiding Gharar

Gharar means excessive uncertainty in the investment process. When you don’t actually know what you own or how the company makes profits, you are in a state of gharar. Complex derivatives and hidden bets in contracts fall under this category.

Staying Away from Forbidden Activities

Investing in alcohol, gambling, weapons, or immoral content needs no discussion. But the most important is paying attention to indirect investments – such as a company providing systems for casinos.

Responsible and Socially Ethical Investing

Shariah-compliant US stocks are not just about profits. Companies that treat employees fairly, contribute to community development, and respect the environment attract conscious investors.

Transparency and Justice

All contracts and financial practices must be completely transparent. Ambiguity in profit distribution or hiding red-flag financial information is considered a violation of the principle.

Stock Evaluation Criteria: Critical Financial Ratios

When searching for US Sharia-compliant stocks, you’ll encounter three basic financial checks:

First Check: Riba Debt Ratio
Riba-based debts should not exceed 30% of the company’s market value (and not total assets). This is a critical figure because it determines whether the company relies excessively on interest-based financing.

Second Check: Funds in Riba-bearing Accounts
Cash held by the company in riba-based bank deposits should not exceed 30% of the market value as well. Large companies often have substantial cash reserves; the key is where they place these funds.

Third Check: Income from Forbidden Sources
Additional income from bank interest or forbidden partnerships should not exceed 5% of total income. Here, careful reading of financial reports is essential.

Practical Steps to Choose Halal Stocks

Stage One: Identify the Core Activity
Start with a simple question: Does the company operate in a halal sector? If the answer is “no,” there’s no point in proceeding. Riba banks, alcohol companies, gambling, tobacco – all are outside the scope.

But don’t stop there. Investigate indirect side activities. Does the company provide services to forbidden companies? Does it earn income from questionable deals?

Stage Two: Examine the Financial Structure
Obtain the latest financial report. Look for:

• Total debts and bank obligations
• Cash and deposits
• Different income sources

Compare these figures with the standards above (30% for debts, 30% for deposits, 5% for non-halal income).

Stage Three: Continuous Monitoring
Don’t buy the stock and forget about it. US companies issue quarterly financial reports. Each new quarter, ratios can change significantly. Your halal investment today might become non-halal tomorrow due to new financing decisions.

Practical Tools for Screening US Sharia-compliant Stocks

Instead of manually performing all checks, you can benefit from specialized platforms:

Zoya: An American app that updates data in real-time. It classifies stocks as 100% halal, mixed (needs purification), or haram. User-friendly interface and clear standards.

Islamicly: Focuses on detailed reports. Each stock comes with an in-depth report explaining debts, interest, and non-halal income. Suitable for investors who prefer deep analysis.

Musaffa: Provides real-time updates and advanced comparison tools. You can compare multiple stocks before making a decision.

How to Purify Stock Dividends

If you own a mixed stock (containing a portion of non-halal income), you need to purify your dividends from this part. The method is simple:

1. Calculate the total dividends received from the stock
2. Multiply by the percentage of non-halal income (according to Shariah reports)
3. Donate this amount to trusted charitable organizations

For example, if you received $100 in dividends and the non-halal income percentage is 5%, donate $5.

Best US Sharia-compliant Stocks to Invest in 2025

Here is a list of the largest US companies that meet the criteria for US Sharia-compliant stocks:

Major Companies:

• NVIDIA (NVDA): Semiconductors, market cap $4.35 trillion
• Apple (AAPL): Technology, market cap $4 trillion
• Alphabet/Google (GOOG): Internet and digital advertising, market cap $3.62 trillion
• Microsoft (MSFT): Software and cloud computing, market cap $3.51 trillion
• Amazon (AMZN): E-commerce, market cap $2.36 trillion
• Meta (META): Social media, market cap $1.55 trillion
• Tesla (TSLA): Electric vehicles, market cap $1.23 trillion
• Eli Lilly (LLY): Pharmaceuticals and healthcare, market cap $1 trillion

Affordable Options:
If you’re looking for smaller-cap stocks, there are options at lower prices:

• MWD Technologies (MKDW): $0.1799
• Wultchang Holdings (WCT): $0.2350
• ProPhase Labs (PRPH): $0.1890

These smaller companies offer greater flexibility but carry higher risks than large caps.

Practical Steps to Start Investing

Step One: Choose Your Investment Method
Do you want actual ownership of stocks for the long term? Or prefer quick trading via CFDs?

Direct ownership is safer from a Sharia perspective, especially if you seek stability. Short-term trading suits those with experience and risk management ability.

Step Two: Select a Trusted Broker
If you want direct ownership: Interactive Brokers is a reliable choice. It provides access to 150 markets in 200 countries with strong regulation.

If you prefer CFD trading: Mitrade offers an easy platform for beginners with 300+ financial instruments.

Step Three: Open Your Account and Start
Register your details, verify your identity, and deposit funds. Most platforms take only minutes.

Step Four: Choose Stocks and Trade
Use specialized tools to verify Shariah compliance, select stocks, and execute trades.

Summary: The Path to Halal Investing Is Not Complex

US Sharia-compliant stocks are not an unattainable dream. With the right understanding of principles, available tools today, and ongoing monitoring, you can build a strong and compliant investment portfolio.

The key is combining three elements: sincere intention, precise knowledge of standards, and continuous follow-up. Remember, halal investing is not conceptually complicated, but it requires discipline and seriousness in execution.

Avoid the five mistakes mentioned at the start, utilize available tools, and consult experts when needed. This way, you ensure a trustworthy investment that aligns with your values and religious principles.