• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Investment Insights>Morningstar's New Stewardship Ratings for Stocks

Related Content

  1. Videos
  2. Articles
  1. A Two-Pronged Approach to Investing in European Stocks

    FPA's Eric Bokota discusses his recipe for finding value in Europe for his new fund as well as why he's cautious of putting money into Asian names.

  2. Stock ETFs Worth Sticking Around For

    Although the stock market isn't a screaming buy today, investors shouldn't completely abandon equities for bonds. Here are some stock ETFs that are worth a closer look.

  3. Can Anything Up the Tempo on Employment Growth?

    Despite month to month volatility, the employment growth trend has been very steady (if uninspiring).

  4. Is Management in Your Corner?

    Morningstar's new Stewardship Ratings for stocks can help reveal if management teams are working in shareholders' best interests or just their own.

Morningstar's New Stewardship Ratings for Stocks

See our initial ratings on more than 250 stocks.

Morningstar Analysts, 05/01/2012

Our corporate Stewardship Rating represents our assessment of management's stewardship of shareholder capital, with particular emphasis on capital allocation decisions.

Analysts consider companies' investment strategy, history of investment timing and valuation, financial leverage, dividend and share buyback policies, execution, management compensation, related party transactions, and accounting practices. Corporate governance practices, such as poison pills and staggered boards, are only considered if they've had a demonstrated impact on shareholder value.

Analysts assign one of three stewardship ratings: "Exemplary," "Standard," and "Poor." Analysts judge stewardship from an equity holder's perspective. Ratings are determined on an absolute basis. Companies are judged not against peers within their industry, but against ideal stewardship of shareholder capital. Most companies will receive a standard rating, and this should be considered the default rating in the absence of evidence that a management team has made exceptionally strong or poor capital allocation decisions.

Ratings under the new methodology are now available on more than 250 companies, with supporting written analysis in the Management & Stewardship section of the company reports. Analysts will roll out the methodology to the remainder of Morningstar's coverage universe throughout 2012. Stewardship grades assigned under the previous system will be removed from company reports, as the old grades aren't translatable into the ratings assigned under the new methodology.

Click here to see our initial ratings on more than 250 companies (pdf).

1
blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.