Morningstar, Inc. provides independent investment insights for investors in the United States, Asia, Australia, Canada, Continental Europe, the United Kingdom, and internationally. It operates through five segments: Morningstar Direct Platform, PitchBook, Morningstar Credit, Morningstar Wealth, and Morningstar Retirement. The company offers managed investments, including mutual funds, exchanged traded funds, separate accounts, collective investment trusts, model portfolios, equities, and fixed-income securities; …
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Competitive advantage assessment
Key strengths
High Return on EquityReturn on equity ranks highly vs peers (score 0.85).
Sticky AUM BaseRevenue stickiness is high (stability score 0.77).
Key risks
Fee Margin PressureFee margin quality is below peers (score 0.39).
Weak Cash ConversionCash conversion is weak (score 0.23).
The dashed ring is the peer median. Defense scores are percentile ranks
against peers, so 50 is roughly the typical company in this group.
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Where MORN ranks in Financial Data & Stock Exchanges
Morningstar, Inc. ranks #9 of 15
scored companies in Financial Data & Stock Exchanges by moat score — the top 60%.
The widest moat in the group is CME Group Inc. (CME)
at 82/100.
Moat scores for companies ranked near MORN in Financial Data & Stock Exchanges
How MORN scores on the Asset Management Specialized defenses
Fee Revenue Quality
Score 48
· 20% of the moat score
Fee revenue quality is the ability to charge above the industry's falling average and keep charging it.
Client Retention & Revenue Stickiness
Score 61
· 18% of the moat score
Assets under management leave far more easily than they arrive, and the fee leaves with them.
Compensation Discipline
Score 62
· 18% of the moat score
Compensation is the largest expense in asset management and the one that decides whether a good year ever reaches shareholders.
Capital Efficiency
Score 69
· 20% of the moat score
Asset managers are asset-light: with little capital employed, a healthy business should earn a very high return on equity, and a merely average one is a real warning.
Earnings Quality & Cash Conversion
Score 42
· 14% of the moat score
Reported profits here can be flattered by performance fees, seed-capital gains and consolidated fund accounting, none of which recur reliably.
Balance Sheet Strength
Score 34
· 10% of the moat score
Because the business needs so little capital, an asset manager carrying meaningful debt has usually borrowed to buy another manager or to fund distributions.
Morningstar, Inc. (MORN) scores 55 out of 100 on the StatsAlpha Moat Map, which rates its competitive advantage as moderate. It ranks #9 of 15 scored companies in Financial Data & Stock Exchanges, the top 60%. The score is a weighted composite of 6 competitive defenses, each measured against industry peers of 14 companies in Financial Data & Stock Exchanges. Its strongest defense is Capital Efficiency (69/100) and its weakest is Balance Sheet Strength (34/100).
How does Morningstar, Inc. compare with other Financial Data & Stock Exchanges companies?
Morningstar, Inc. ranks #9 of 15 scored companies in Financial Data & Stock Exchanges by moat score. The widest moat in Financial Data & Stock Exchanges is CME Group Inc. (CME) at 82/100. The companies ranked closest are Moody's Corporation (MCO) at 60 just above it and S&P Global Inc. (SPGI) at 41 just below it.
How is the moat score calculated?
Each company is scored with an industry-specific template — Asset Management Specialized in this case, chosen because the defenses that matter to a bank are not the ones that matter to a software company. Every defense combines several financial signals, and each signal is measured as a percentile against a peer group of 14 companies in Financial Data & Stock Exchanges. The defenses are then weighted to produce the overall score out of 100.
Why is Morningstar, Inc. scored with the Asset Management Specialized template?
An asset manager owns almost nothing. It charges a fee on someone else's money, pays much of that fee out in compensation, and keeps the remainder — so its economics turn on the fee rate it can defend, whether client money stays, and how much revenue survives the bonus pool. The Asset Management template scores those questions rather than the balance sheet, which in this industry is largely beside the point.
Which competitive defenses are measured for Morningstar, Inc.?
The Asset Management Specialized template measures 6 defenses, and MORN scores: Fee Revenue Quality (48), Client Retention & Revenue Stickiness (61), Compensation Discipline (62), Capital Efficiency (69), Earnings Quality & Cash Conversion (42), Balance Sheet Strength (34). Each is scored independently as a percentile against peers, so a company can be strong on one and weak on another — the overall score reflects how those defenses are weighted for this industry.
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