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4 Misunderstood Stocks With Moats

Premium Exclusive: The market was unimpressed with the results from these moaty companies this week, but we think their long-term stories remain intact.

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So far, so good this earnings season. With earnings in for just over half of all S&P 500 companies, FactSet notes that 79% of those companies have reported a positive earnings surprise, lifting the blended earnings growth rate on the S&P 500 to an impressive 23.2% for the quarter thus far.

At Morningstar, we don't give quarterly earnings reports and short-term guidance too much weight. Rather, we focus on a company's long-term sustainable competitive advantages, encapsulated in our economic moat ratings. We expect companies with moats to deliver superior returns over time. Of course, a company might release information when reporting earnings that will lead an analyst to change his or her moat rating or fair value estimate of the company. But more often than not, short-term earnings disappointments are no more than blips in the long-term picture.

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Susan Dziubinski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.