Economic Moats

Morningstar’s analysts recently began covering these high-quality stocks.

Dividends aren’t a magical source of returns, but they can offer an edge.

Wide moats plus low valuations have been a winning combination.

We’ll review the top stocks, funds, and exchange-traded funds this week as well as updates you can make to your portfolio.

Do any of this year’s top performers have gas left in the tank for 2023?

Cisco faces greater competition in new models of networking, but we expect it to retain its leadership.

Quality stocks including Microsoft and Amazon have outperformed since the market low in June, but they're still undervalued.

The wide-moat companies that many value managers favor tend to be less prone to controversy.

They can generate high returns, under the right conditions, but their best feature is safety.

These funds tend to hold up better than the market in a recession.

With valuations coming down, wide-moat stocks may be in a better position for a period of rising rates and inflation.

Undervalued high-quality stocks may be just the ticket in a choppy market.

Do any of this year’s top performers have gas left in the tank for 2022?

We expect consumers to begin spending more on experiences, such as travel.

Profits cooled in the period, as supply chain disruptions and inflationary headwinds took a toll.

We do not expect this to significantly affect our fair value estimate or moat rating for the firm.

The company left its larger financial targets in place. Our fair value estimate and narrow moat rating are unchanged.

We are maintaining our fair value estimate for narrow-moat Apple following its annual product showcase.

These wide-moat firms all earn Exemplary capital allocation ratings and trade in the 4- and 5-star range.