5 Wide-Moat Stocks of Tomorrow

These narrow-moat firms have positive moat trends and big chances to become industry leaders in the future

Valerio Baselli 29 March, 2021 | 8:54AM
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Companies poised to become industry leaders and those seeking to carve out wide Morningstar economic moats share some of the same qualities. For instance, they have a competitive edge – it could be high switching costs, powerful brands, or a significant cost advantage. In other words, they've begun to carve out an economic moat. But they aren't resting on their laurels. Instead, these companies continue to widen their moat by exploiting trends in their industries.

Our latest screen unearths European stocks with these qualities. We are looking at narrow-moat companies with positive moat trends - meaning their moats are strengthening. While there’s no guarantee these companies will eventually establish wide moats, they certainly have the right ingredients to do so. They’re strong stocks to buy at the right prices.

Perhaps not surprisingly, most of these well-run companies are fairly or overvalued according to our measures. But they’re all topnotch watchlist candidates.

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Valerio Baselli

Valerio Baselli  is an Editor at Morningstar Italy.

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