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The market today faces a number of risks, among them inflation, rising interest rates and a possible recession, according to Susan Dziubinski, Morningstar.com’s director of content.
For investors in these uncertain times, owning companies that offer a sense of certainty in terms of their fundamentals and cash flows makes sense. Morningstar has 126 companies on its current list of best ones to own.
These have significant competitive advantages, which Morningstar analysts think are stable or growing, as indicated by the firm’s Economic Moat Ratings. They also have low or medium Uncertainty Ratings, which translate as predictable cash flows. And their management teams have a history of making smart capital-allocation decisions.
Dziubinski notes that the best companies are not always the best stocks to buy at a given point in time. But how much an investor pays to own a company, whether it is best or otherwise, is also important.
See the gallery for Morningstar’s selection of the 10 best companies with the most undervalued stock prices today.