4 Undervalued Growth Stocks With Moats You Can Trust

Morningstar recently released a list of 49 stocks that were newly rated 4 stars, following the recent pullback in the U.S. stock market. A 4-star rating means Morningstar believes these companies are undervalued relative to their long-term fair value.

But not all 4-star stocks are built the same.

I went through the full list and narrowed it down to four companies I believe are built to last — businesses with strong moats and the ability to keep compounding over time. These aren’t hype stocks or passing trends. They’re solid, long-term businesses with staying power.

Here are my picks:

#1 S&P Global (SPGI)

Industry: Financial Data & Exchanges
Morningstar’s Fair Value Estimate: $540 (my range: $474–$516)
Price: $497.88
Undervalued by: 8%

S&P Global is one of the most powerful yet overlooked data businesses in the world. It controls the S&P credit rating agency, the S&P Dow Jones indices, and Capital IQ — tools that investors, banks, and asset managers rely on every day.

It’s like a toll booth in global finance — collecting small fees every time someone issues a bond, builds an index fund, or needs financial analysis. The best part? These services are non-cyclical and deeply embedded into client workflows.

Moat drivers:

• Regulatory lock-in and credibility: You can’t just replace a credit rating agency overnight.

• Index licensing and branding: Index funds must pay a royalty fee to use “S&P 500” and other trademarks.

• Recurring revenue: Data, analytics, and subscriptions keep flowing regardless of markets.

Risks:

• Regulatory scrutiny: Especially around credit ratings and index influence.

• M&A risk: Their recent IHS Markit acquisition must be executed well.

We first covered this stock when it was trading at $334 in 2023. It’s a quiet compounder — rarely in the headlines, but consistently executing and growing in the background.

Bottom line: A wide-moat, cash-generative business with steady growth. Boring — and that’s exactly what makes it powerful.