Stocks that have moats have a built in advantage and just by owning them, as an investor you are protected from downside of the marketplace. If you own a few of the stocks that is good, if you do not part of your homework is to find similar stocks and own them.

Phil Dabo at Morningstar Research examined stocks that have moats from the Russell 1000 ( whatever company you invest through should have similar type of information).

Mr. Dabo used the following criteria for his list:

stocks with wide moats (Morningstar criteria – a wide moat company has a sustainable competitve advantage that enables it to keep competitors at bay for an extended period of time. The theory being they should be able to earn excess profits in perfectly competitive markets)

strong quarterly earnings momentum ( a measure of profitability)

high Morningstar Quantitative Financial Health Score – based on the company’s leverage

stocks with market capitalization of greater than $3.8 billion

Company Mkt Cap Wide Moat Fin’l Qtly Earns Qtly CF Divid 12M Price Recent

$ Bil Score Health Mo % Mo % Yld % Chg % Price

Johnson & Johnson 414.309 5 3 1.0 17.6 2.6 7.9 157.38

Graco 12.121 5 3 8.3 8.5 1.0 39.1 72.35

P&G 345.012 5 3 5.1 8.8 2.3 11.4 139.14

Microsoft 1,681.605 5 3 7.7 5.5 1.0 41.0 222.42

Expeditors Intl Wash 16.098 5 3 5.7 6.2 1.1 21.9 95.11

Costco Wholesale 166.896 5 3 5.8 5.8 0.7 28.2 376.78

Alphabet 1,104.579 5 3 4.5 5.0 n/a 31.0 1,751.88

Landstar System 5.168 5 3 5.8 2.6 0.6 18.3 134.66

Agilent Tech 36.358 5 3 2.8 4.6 0.7 38.9 118.49

Colgate-Palmolive 73.296 5 3 2.7 3.6 2.1 24.2 85.51

Linking to dividend paying stocks, on the list you can see some companies which likely you use the products. If you do that is a great place to start, if you use it why do others also use it. As long as you are a buyer you can determine if the quality and price keeps you coming back. The ideal in buying a dividend company is a monopoly or monopoly like conditions which allows for profitability to continue on a yearly basis. To do that the company has to continually execute well and that is part of your homework.

There are more questions than answers, till the next time – to raising questions.