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
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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 Co130.07 CAD-3.71Rating
Canadian Pacific Railway Ltd97.01 CAD-0.45Rating
Enbridge Inc47.20 CAD1.07Rating
Royal Bank of Canada121.86 CAD0.59Rating

About Author

Ruth Saldanha

Ruth Saldanha  is Senior Editor at Morningstar.ca. Follow her on Twitter @KarishmaRuth.

 
 
 

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