10 cheap wide-moat US stocks for 2025
Undervalued high-quality names from the Morningstar Wide Moat Focus Index are attractive stocks to buy for long-term investors.
Mentioned: The Estee Lauder Companies Inc Class A (EL), Nike Inc Class B (NKE), Pfizer Inc (PFE), The Campbell's Co (CPB), Bio-Rad Laboratories Inc Class A (BIO), Brown-Forman Corp Registered Shs -B- Non Vtg (BF.B), Adobe Inc (ADBE), Applied Materials Inc (AMAT), Altria Group Inc (MO), Gilead Sciences Inc (GILD), IDEX Corp (IEX), Salesforce Inc (CRM), Clorox Co (CLX), PepsiCo Inc (PEP), The Hershey Co (HSY), Caterpillar Inc (CAT), Workday Inc Class A (WDAY), Nordson Corp (NDSN), Equifax Inc (EFX), Veeva Systems Inc Class A (VEEV), Corteva Inc (CTVA), Microchip Technology Inc (MCHP), Thermo Fisher Scientific Inc (TMO), West Pharmaceutical Services Inc (WST), Zimmer Biomet Holdings Inc (ZBH), Alphabet Inc Class A (GOOGL), Bristol-Myers Squibb Co (BMY), Constellation Brands Inc Class A (STZ)
The Morningstar Wide Moat Focus Index tracks companies that earn Morningstar Economic Moat Ratings of wide and whose stocks are trading at the lowest current market prices relative to our fair value estimates.
Wide-moat companies carry sound balance sheets and significant competitive advantages—two desirable qualities in the face of today’s economic uncertainty.
The constituents of the Morningstar Wide Moat Focus Index are a fertile hunting ground for long-term investors looking for high-quality stocks to buy that are trading at cheap prices.
10 cheap wide-moat US stocks for 2025
These were 10 of the most undervalued wide-moat stocks in the Morningstar Wide Moat Focus Index as of June 23, 2025.
- Nike NKE
- Pfizer PFE
- Thermo Fisher Scientific TMO
- Estee Lauder EL
- Constellation Brands STZ
- Adobe ADBE
- Alphabet GOOGL
- West Pharmaceutical Services WEST
- Zimmer Biomet ZBH
- Bristol-Myers Squibb BMY
The most undervalued wide-moat stock on the list, Nike, was trading 46% below our fair value estimate as of June 23, while the last company on the list, Bristol-Myers Squibb, was trading 29% below our fair value estimate. We think all 10 of these names are high-quality stock ideas for long-term investors to consider.
To keep the index focused on the least-expensive high-quality stocks, Morningstar reconstitutes it regularly. The index consists of two subportfolios containing 40 stocks each, many of which are overlapping positions. The subportfolios are reconstituted semiannually in alternating quarters on a “staggered” schedule.
Morningstar reevaluates the index’s holdings and adds and removes stocks based on a preset methodology. Because stocks are equally weighted within each subportfolio, the reconstitution process also involves rightsizing positions.
After the most recent reconstitution, half the portfolio added nine stocks and eliminated nine stocks.
9 undervalued stocks added to the Morningstar Wide Moat Focus Index
These cheap stocks were added to the reconstituted subportfolio of the Morningstar Wide Moat Focus Index on June 20.
| Stock/Ticker | Sector |
|---|---|
| Applied Materials AMAT | Technology |
| Caterpillar CAT | Industrials |
| Clorox CLX | Consumer Defensive |
| Hershey HSY | Consumer Defensive |
| Idex Corporation IEX | Industrials |
| Nordson NDSN | Industrials |
| PepsiCo PEP | Consumer Defensive |
| Salesforce CRM | Technology |
| Workday WDAY | Technology |
The nine cheap wide-moat stocks added to the index this quarter hail equally from three sectors: consumer defensive, industrials, and technology. While all three of these sectors look fairly valued today according to Morningstar, there are obviously undervalued stocks to be found in each.
9 stocks removed from the Morningstar Wide Moat Focus Index
These stocks were removed from the reconstituted subportfolio of the Morningstar Wide Moat Focus Index on June 20.
| Stock/Ticker | Sector | Why Removed |
|---|---|---|
| Altria Group MO | Consumer Defensive | Price/Fair Value |
| Bio-Rad Laboratories BIO | Healthcare | Market Value Percentile |
| Brown-Forman BF.B | Consumer Defensive | Fair Value Under Review |
| Campbell’s CPB | Consumer Defensive | Market Value Percentile |
| Corteva CTVA | Basic Materials | Price/Fair Value |
| Equifax EFX | Industrials | Price/Fair Value |
| Gilead Sciences GILD | Healthcare | Price/Fair Value |
| Microchip Technology MCHP | Technology | Price/Fair Value |
| Veeva Systems VEEV | Healthcare | Price/Fair Value |
Stocks can be removed from the index for a few different reasons: if we downgrade their economic moat ratings, if their market capitalizations fall beneath a certain level, or if their price/fair value ratios rise significantly. Most of the stocks removed from the subportfolio during the latest reconstitution were pushed out by stocks that were trading at more attractive price/fair value ratios at the time of reconstitution.
Bio-Rad and Campbell’s were booted from the reconstituted portfolio after their market capitalizations fell below the index’s requirements, while Brown-Forman’s fair value was under review at the time of reconstitution and, as a result, was removed from the reconstituted portfolio.
The stocks that were removed shouldn’t always be considered stocks to sell, though—especially when the removed stocks are still trading in what we’d consider a buying range. They’re just not as undervalued as the stocks added to the index at the time of the reconstitution.
What are Wide-Moat Stocks?
Morningstar thinks that companies with wide economic moats have significant advantages that allow them to successfully fend off competitors for decades. Companies can carve out their economic moats in a variety of different ways: by having high switching costs, through strong brand identities, or by possessing economies of scale, to name just a few.
Over time, we’ve found that the strategy of investing in wide-moat stocks trading at a discount to their fair values has been an effective approach to stock investing.
