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# Morningstar: The Verdict on Wide-Moat Stocks
- URL: https://www.smartinvestingsociety.com/morningstar-the-verdict-on-wide-moat-stocks/
- Published: 2022-04-29T13:40:25.000Z
- Updated: 2022-04-29T13:40:25.000Z
- Author: Smart Investing
- Tags: Stock market strategies, Value Investing, #wp, #wp-post, #Import 2026-09-30 15:32

Value investing has a number of tenants. One of the more popular items that value investors look for is a durable competitive advantage over peers. This term has been popularized as a “moat.”

A moat can come in a number of ways. A strong brand can offer a moat, as consumers will be willing to pay a slightly higher price compared to a non-brand name. Or a company may have a legal or cost advantage.

For investors, moats tend to offer a slight edge that can lead to much higher returns over time as returns compound.

However, investors need to be aware of a number of potential shortcomings. For instance, a moat is not a guarantee. Changing market conditions could mean that a moat is lost over time. It may even happen quickly depending on how fast an industry changes.

While there are some potential warning signs to watch for, moats have a number of advantages for patient investors. The strongest one in volatile markets is safety. When markets start to drop, companies in financial trouble may face bankruptcy.

But for a strong company with a wide moat, such as **Microsoft (MSFT)**, a market correction can offer long-term investors a solid entry point.

Using wide moats to focus on safety looks like one way to take advantage of the latest market selloff for future profits ahead.

[For the full read on the power of wide-moat stocks via Morningstar, click here.](https://www.morningstar.com/articles/1089286/the-verdict-on-wide-moat-stocks?ref=smartinvestingsociety.com)