Five Canadian stocks with a wide economic moat

Two banks, two railways and an energy distributor make the list of Morningstar's wide moat companies that can sustain growth in the long term.

Ruth Saldanha 12 November, 2018 | 6:00PM

The S&P TSX Composite index is down more than 3% year to date, and down a little over 2% from last year. Because of the market dip last month, a number of stocks have slipped below our fair value estimates, and are trading rather cheap at the moment.

One way to find companies that have competitive advantages, and the ability to sustain growth in the long term, would be to look for wide moats.

Coined by Warren Buffet, the term economic moat refers to a company's sustainable advantages over its competitors. This can be achieved in one of five ways: cost advantage, efficient scale, intangible assets, network effect or switching costs. Morningstar assigns its Economic Moat Rating (wide, narrow or no moat) to all the companies its equity analysts cover.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Canadian National Railway Co142.98 CAD-0.49
Canadian Pacific Railway Ltd422.81 CAD-0.30
Enbridge Inc41.25 CAD-0.15
Royal Bank of Canada108.13 CAD0.39

About Author

Ruth Saldanha

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca

 

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