If there’s something investors have had to get used to this year, it’s market uncertainty. Risks from inflation, rising interest rates and a possible recession continue to confront the market.
“During uncertain times, investors may want to own companies that offer some sense of certainty in terms of cash flows and company fundamentals,” Susan Dziubinski, director of content at Morningstar.com, wrote in a mid-September blog post.
Dziubinski pointed to Morningstar’s Best Companies to Own list — 127 in all — as a source of such investments. The companies on the list have significant competitive advantages, which analysts consider stable and growing.
“We believe the best companies have predictable cash flows and are run by management teams that have a history of making smart capital-allocation decisions,” she said.
Dziubinski noted, however, that the best companies may not be the best stocks to buy at a given point in time. “How much an investor pays to own a company — best or otherwise — is important, too.”
See the gallery for the 10 best companies with the most undervalued stock prices today, selected by Morningstar analysts. Year-to-date performance is as of Sept. 16.