Morningstar Review – Is This Research Service Worth Using?

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By Theo Madsen

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Morningstar Review

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Morningstar Review

  • Quality
  • Ease of Use
  • Value
4.5

Summary

Morningstar is a well-known investment research firm with a focus on stock, ETF, and mutual fund analysis. It includes analysis, analyst reports, stock/fund recommendations, screeners, portfolios, articles, and more. Learn everything you need to know about investment research firm by reading our complete Morningstar review now.

Pros

  • Detailed research on stocks, ETFs, and mutual funds
  • Stock and fund ratings and recommendation lists
  • Analyst reports for stocks and funds
  • Comprehensive ETF and mutual fund screeners
  • Excellent portfolio tracking and analysis tools

Cons

  • Screeners are very clunky to use
  • Analyst reports aren’t updated frequently for many funds

About Morningstar

Morningstar is an investment research firm that specializes in stock, ETF, and mutual fund analysis. The platform is best known for its free market analysis and fund data, but it also offers a subscription service called Morningstar Premium. With Premium, you get stock and fund recommendations, analyst reports, and screeners to help you decide what to invest in.

In our Morningstar review, we’ll show you everything this research platform has to offer and help you decide if Morningstar Premium is worth it.

Morningstar Homepage

Morningstar Pricing Options

Morningstar offers market analysis articles, stock and fund data, and portfolio building tools for free.

If you want access to Morningstar’s analyst reports, ratings, or top stock and fund lists, you’ll need a Morningstar Premium subscription. Morningstar Premium costs $34.95 per month, $249 per year, or $399 for 2 years. You can try Morningstar Premium with a 14-day free trial.

Morningstar Features

Stock, ETF, and Mutual Fund Analysis

Stock, ETF, and mutual fund analysis is at the heart of Morningstar’s platform. The majority of data on Morningstar is available for free, but the amount of data can be overwhelming at times. Morningstar Premium is designed to help you quickly identify potential investments.

With a free Morningstar account, you get access to stock analysis pages that include financial data, basic price charts, news articles, and dividend history. You can also see which exchange-traded funds and mutual funds hold a stock, and how much of a company’s shares those funds own.

For ETFs and mutual funds, you can see key details like the fund’s cost, performance, and management details. Morningstar offers a number of useful metrics, including describing every fund as focused on small-cap vs. large-cap and value vs. growth holdings. Performance charts and tables show how a fund compares against its benchmark index and against competing funds. Morningstar also rates each fund’s risk and return relative to its peers.

As a Morningstar Premium subscriber, you get access to additional data that can help you more quickly spot potential investments. For stocks, Premium subscribers can see a company’s estimated fair value as determined by Morningstar analysts. You can also view analyst grade ratings on a simple 1-5-star scale.

Morningstar Stock Page

For funds, Morningstar Premium subscribers have access to a rating system that includes Bronze, Silver, and Gold. Each fund also receives a Morningstar rating for 3 “pillars” – process, people, and parent. These pillars consider a fund’s process for picking stocks, the quality of the fund managers, and whether the fund management firm’s interests are aligned with shareholders’ interests.

Morningstar ETF Page

The majority of the research is based on fundamental analysis, historical performance, and fee structures. This is ideal for mutual fund analysis, however technical traders who want guidance may use a service like MarketSmith or MarketClub to get the “technical” take on some of these stocks.

Analyst Reports

Morningstar Premium subscribers also get access to research reports from Morningstar analysts. Morningstar reports are available for the vast majority of US stocks, ETFs, and mutual funds, although for many funds it can be a year or more between updates. 

For stocks, analyst reports are broken down into 5 categories: Business Strategy and Outlook, Economic Moat, Fair Value and Profit Drivers, Risk and Uncertainty, and Capital Allocation. The reports take 5-10 minutes to read in full. For funds, analyst reports go into detail about the process, people, and parent ratings, as well as discuss a fund’s recent performance. The analyst research tools are not as comprehensive as a standalone service like MarketBeat, but they are perfectly suited for investors who want a basic understanding of analyst opinions on a stock or fund.

Stock and Fund Recommendations

Morningstar Premium subscribers can view lists of recommended stocks, ETFs, and mutual funds to generate investment ideas.

The 5-star stocks list shows all 5-star-rated stocks currently on Morningstar, along with their economic moat rating and fair value uncertainty. The Wide Moat + Undervalued stock list displays stocks that may appeal especially to value investors.

Morningstar Wide Moat List

Morningstar has Medalist Funds lists for ETFs and mutual funds, which show top-rated funds along with their performance and category. Morningstar also has lists of bond funds, including bond index funds and foreign bond funds.

Stock and Fund Screeners

Morningstar offers both free and premium stock screeners. The free screener is relatively basic and allows you to sort stocks by performance, P/E ratio, and dividend yield. The premium screener offers dozens of parameters related to performance, valuation metrics, financial data, share structure, and Morningstar’s 5-star rating system.

Morningstar Stock Screener

The screener isn’t as user-friendly as other stock screeners we’ve tested, though, such as FinViz. Every filter needs to be edited in its own pop-up window, so setting up a new screen is somewhat time-consuming. You can save screens for reuse later.

The platform also includes 9 pre-made stock screens that target stocks based on performance, dividend yield, or value investing strategies like those from Warren Buffet and Benjamin Graham.

Morningstar’s ETF and mutual fund screeners are among the best fund screeners available. The ETF screener lets you sort funds by Morningstar ratings, performance, expenses, risk, correlation to major stock indices, sector weights, or even exposure to individual stocks. It’s very comprehensive, and you can see the distribution of funds for any parameter when setting up your screen.

Morningstar ETF Screener

The mutual fund screener isn’t as interactive, but the variety of filters is just as impressive. You can sort mutual funds based on fund type, Morningstar risk and return ratings, performance, portfolio composition, and management.

Portfolios

Morningstar enables both free and premium users to set up an unlimited number of portfolios and watchlists on the platform. You can import portfolios from a brokerage account or enter positions manually. Morningstar offers daily email updates about your portfolios and you can easily compare the performance of your portfolio against major stock indices or Morningstar fund categories.

Premium subscribers also get access to Morningstar’s portfolio X-Ray tool. This breaks down your asset allocation by sector, geographic region, and asset type, as well as offers insight into how your investment portfolio is diversified among value and growth companies. The X-Ray tool is especially useful if you hold a lot of ETFs and mutual funds since it considers the individual holdings in these funds when generating a report.

Morningstar Portfolio X-Ray

Analysis Articles

Morningstar offers a large selection of analysis and how-to articles for free. These articles cover a wide range of topics, from stocks and funds to economic trends to specialized investment products like annuities. Some articles focus on helping you build a portfolio, while others highlight stocks that Morningstar analysts are watching. While these analysis articles aren’t as deeply researched as those on sites like Seeking Alpha, they definitely add a lot of great insights for investors who want to stay informed.

Morningstar Analysis Articles

Morningstar Platform Differentiators

Morningstar offers an attractive mix of features for investing in stocks, ETFs, and mutual funds. First, investors have access to detailed financial data and analysis from Morningstar’s team of in-house analysts. The star ratings and lists offer a quick overview of what stocks and funds are worth your attention (similar to Zacks Rank), while the analyst reports offer more detail for self-directed investors who want to dig in further.

Investors also get the tools they need to build a portfolio that mixes stocks and funds. For example, the stock and fund screeners let you filter by fund ownership or stock exposure, respectively. The portfolio management tools break down your fund holdings into their components so you can more clearly see how you’re diversified.

In addition, the fact that Morningstar offers such detailed information about mutual funds is unique. Most comparable fund research platforms offer data exclusively for ETFs. For mutual fund investors, Morningstar is essentially the gold standard among research platforms.

What Type of Investor is Morningstar Best For?

Morningstar is best for long-term investors who want to invest in a mix of stocks, ETFs, and mutual funds. That said, it can function equally well if you only want to invest in one of these asset classes.

The platform is designed to give you the information you need to build your own portfolio. While there are top stock and fund lists, Morningstar isn’t a stock picking service. So, investors need to be willing to do their own research and dig into the analyst reports to decide on a particular investment.

Stock investors should keep in mind that Morningstar’s focus is on long-term value. Economic moat and fair value are key components of the platform’s stock rating system, and there is no discussion of technical analysis.

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Theo Madsen

Theo has been actively trading the forex markets since 2013. Over the past five years, he has gained experience trading currencies, stocks, options, and futures. Theo's trading experience led him to test out over one hundred different trading services and he shares his insights in reviews to help other traders.

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