I uncovered an interesting presentation from Morningstar on the Power of Economic Moats. An economic moat is a competitive advantage that allows a company to generate high returns for long periods of time. There are several sources of competitive advantage, which we would cover below.
Having an economic moat allows a business to generate high rates of return on investment over a long period of time. That allows for faster earnings growth, more predictable cashflows and generating excess cashflows too. Businesses with high moats have generated high returns on investment for long periods of time. Duration is very important.
There are five source of sustainable competitive advantage…
This post originally appeared at Dividend Growth Investor.