3 Wide Moat Stocks for the Core of Your Portfolio

Wide-moat stocks, bought at the right price, are the sorts of structurally sound businesses, or “steady-eddies”, savvy investors look to own at the core of their portfolio

Emma Wall 8 September, 2015 | 3:17PM

This article is part of Morningstar’s Guide to Your Financial Education, providing our readers with the tools they need to become a successful private investor.

As physical moats protect castles from enemies, economic moats are structural advantages that protect companies from competitors. Through our proprietary research of over a thousand companies, we have identified five major moat sources: intangible assets, cost advantage, switching costs, network effect, and efficient scale. These moats – or competitive advantages – can be the key to successful stock selection.

Wide-moat stocks, bought at the right price, are the sorts of structurally sound businesses, or “steady-eddies”, savvy investors look to own at the core of their portfolio. Around these reliable stocks you can build out a balanced and diversified investment portfolio.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
British American Tobacco PLC2,491.50 GBX-0.93
Unilever PLC4,539.00 GBX-0.83

About Author

Emma Wall  is former Senior International Editor for Morningstar

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