Economic Moat
Stocks.
The economic moat stocks list ranks stocks by how many of five moat-footprint tests they pass: lasting returns on capital, margins that hold, profit that turns into cash, and growth that does not eat it. A moat cannot be measured directly, so this page ranks the footprint one leaves in ten years of filings, and never calls a stock a moat. Start with a ready-made view, then fine-tune it. A good year is easy to find; a good decade is rare.
How it works: each stock runs five yes-or-no tests and the page counts the passes, with return on invested capital breaking ties. Every test is shown for every stock, so nothing is hidden in a score. Banks, insurers, lenders, real estate and utilities are left out; payment networks, exchanges and data firms are kept. New to the idea? Read what an economic moat is.
Reading the filings…
The five tests, exactly
| Test | A stock passes when | Why it points to a moat |
|---|---|---|
| Returns on capital | Return on invested capital is at least 15% in at least 80% of the measured years. Return = operating income after a 21% tax over year-end equity plus debt. Negative equity (heavy buybacks) counts as zero, so capital is the debt alone and the row is flagged; a filing with no debt line counts as no debt. A stock with too few figure years cannot run this test | Rivals cannot compete the extra profit away |
| Margin against its sector | Operating income over revenue, across the window, is at or above the median of its sector (the median of all stocks when the sector has fewer than five). This test is relative, so about half of every sector passes by design | Pricing power shows up as a better margin than peers |
| Margin stability | No operating margin falls more than 30% below the best margin earlier in the window (the lowest is at least 70% of an earlier peak), and no year is a loss | A real advantage holds through a downturn |
| Cash backing | Free cash flow is positive in every year and cash conversion (operating cash flow over net income, whole window) is at least 90%, the Earnings Quality watch line | The profit is real cash, not accounting |
| Light reinvestment | Capital expenditures take no more than 30% of operating cash flow | High returns without constantly feeding the machine |
- Tiers. Five of five is a strong footprint, four solid, three mixed, fewer thin. A stock that cannot run the returns test can pass at most four.
- Trend. Widening means return on capital rose at least 3 points and operating margin at least 1 point, comparing the average of the last three years with the first three. Eroding means both fell by that much. A move of 10 points or more in either measure counts on its own, unless the other moved the opposite way as far. With no return figure the margin alone decides, at 2 points.
- Left out: banks, insurers, lenders, real-estate companies and utilities. Their returns come from lending, premiums or regulated building. Payment networks, exchanges, ratings and data firms are kept, because a return on capital describes them well. The Free Cash Flow Screener leaves the whole financial sector out.
- Needs the whole window. The ten-year view ranks only stocks with ten fiscal years of data; the five-year view takes everyone with five.
What this can't see
- The future. A moat is a bet that an advantage will last. These tests only show that it has, so a fading advantage can still pass and a young one can fail.
- The source of the advantage. Network effects, switching costs, low costs, brands and patents all look alike in the numbers. Read the business to learn which one it is.
- Price. A great business can already be priced for it. Pair this list with the free-cash-flow yield and the intrinsic value calculator.
- Cash, leases and stock pay. The filings data has no cash line, so cash is not subtracted from invested capital, which lowers returns for cash-rich companies. Leases are not added to debt, and stock-based pay is not subtracted from the cash test (each row's details show it as a share of operating cash flow).
- Cyclicals at a peak. In the five-year view a fertilizer, chip or equipment maker can pass everything at the top of a boom. The ten-year view includes a down-cycle.
- Survivors only. It covers the large US stocks we track today. Companies that had a moat and lost it badly enough to leave the index are not in it.
On Oct 23, 2026, 31 of the 270 stocks this site can measure passed all five moat-footprint tests over ten years, and 73 passed at least four. The highest return on capital among the five-test group belongs to IDEXX Laboratories (IDXX), at about 48% a year after tax from 2016 to 2025, with an operating margin of 27%, followed by Mastercard (MA), O'Reilly Automotive (ORLY) and Fortinet (FTNT). The median stock earned 13%.
Which Stocks Have The
Strongest Moat Footprint?
Every stock we can measure, ranked by tests passed, highest return on capital first within a tie. Pick a ready-made view, fine-tune it, click a column heading to sort, and open Details on any row to read each test in words against its own figures. The five dots beside each count are the tests: filled is a pass, hollow a miss. The bars show return on capital for every fiscal year against the 15% line.
New here? Start with a view, then fine-tune it with the filters below.
Fine-tune: set your own minimums
Loading…
Why is a stock missing from the list?
Type a ticker to see whether it is measured, left out on purpose, or short of fiscal years.
Where Do Returns And Margins
Sit Across The List?
One dot per stock in the current view: average return on invested capital across, operating margin up, bigger dots for bigger companies. Dots toward the top right earn a lot on their capital and keep a lot of each sale. The colour is the tier, so you can see how the five-test stocks cluster.
How Do You Read
The Economic Moat Stocks List?
A passed test is a starting point, not a conclusion. These are the questions to ask of each number.
Tests passed
Five of five means the filings look the way a moat looks on every measure. Four is still strong: look at which one was missed, because a miss on reinvestment (a capital-hungry growth phase) means something different from a miss on stability (a business that gave way in a downturn).
Return on invested capital
Return on invested capital is operating profit after tax divided by shareholders' equity plus debt: how many cents of profit each dollar of capital earns.
15% or more, most years is this page's bar. Heavy buybacks can push equity below zero; the page then counts it as zero, which leaves the debt alone as capital and still flatters the return, so those rows are flagged in their details.
Margin stability
Margin stability is the lowest operating margin as a share of the best margin earlier in the window: 100% means it never fell below an earlier peak, and under 70% means it gave way.
A business that keeps its margin through a recession is one customers did not walk away from. A margin that only rose scores 100.
Trend
Widening is returns and margins both rising, eroding both falling. It is the quickest way to spot a once-strong business under pressure, and a good reason to read the filings before trusting an old reputation.
See Capital-Light Compounders for how little capital growth needs.
Which stocks have the strongest economic moat footprint?
On Oct 23, 2026, 31 of the 270 stocks this site can measure passed all five moat-footprint tests over ten years, and 73 passed at least four. The highest return on capital among the five-test group belongs to IDEXX Laboratories (IDXX), at about 48% a year after tax from 2016 to 2025, with an operating margin of 27%, followed by Mastercard (MA), O'Reilly Automotive (ORLY) and Fortinet (FTNT). The median stock earned 13%. A moat cannot be measured directly, so these are the stocks whose filings look the way a moat looks, not a list of moats.
Highest returns among the five-test group
| Company | Tests passed | Return on capital | Operating margin | Margin stability | Change in return |
|---|---|---|---|---|---|
| IDXXIDEXX Laboratories Inc | 5 of 5 | 48% | 27% | 92% | −11 pts |
| MAMastercard Inc | 5 of 5 | 47% | 55% | 91% | +5 pts |
| ORLYO'Reilly Automotive Inc | 5 of 5 | 44% | 20% | 89% | +8 pts |
| FTNTFortinet Inc | 5 of 5 | 44% | 23% | 95% | +64 pts |
| WSMWilliams-Sonoma Inc | 5 of 5 | 44% | 14% | 83% | +25 pts |
| AAPLApple Inc | 5 of 5 | 41% | 29% | 87% | +37 pts |
| LIILennox International Inc | 5 of 5 | 38% | 15% | 76% | −0 pts |
| HDHome Depot Inc | 5 of 5 | 38% | 14% | 83% | −11 pts |
| AZOAutozone Inc | 5 of 5 | 35% | 19% | 83% | +2 pts |
| PAYXPaychex Inc | 5 of 5 | 34% | 39% | 91% | −13 pts |
Widening moats
| Company | Tests passed | Return on capital | Operating margin | Margin stability | Change in return |
|---|---|---|---|---|---|
| FTNTFortinet Inc | 5 of 5 | 44% | 23% | 95% | +64 pts |
| AAPLApple Inc | 5 of 5 | 41% | 29% | 87% | +37 pts |
| WSMWilliams-Sonoma Inc | 5 of 5 | 44% | 14% | 83% | +25 pts |
| DECKDeckers Outdoor Corp | 4 of 5 | 26% | 19% | 91% | +23 pts |
| ADBEAdobe Inc | 5 of 5 | 23% | 33% | 85% | +16 pts |
Eroding moats
| Company | Tests passed | Return on capital | Operating margin | Margin stability | Change in return |
|---|---|---|---|---|---|
| BABoeing Co | 0 of 5 | 14% | 0% | -185% | −63 pts |
| SPGIS&P Global Inc | 3 of 5 | 37% | 44% | 55% | −44 pts |
| TTWOTake-Two Interactive Software Inc | 1 of 5 | -6% | -19% | -418% | −43 pts |
| AMCRAmcor PLC | 1 of 5 | 20% | 9% | 63% | −43 pts |
| INTUIntuit Inc | 4 of 5 | 23% | 25% | 71% | −27 pts |
The list above has the five-year view, the other filters, every test in words for each stock and the map; economic moat and return on invested capital are defined in the glossary, and the page's "five tests, exactly" table lists each test and its bar.
Operating income, equity, debt, operating cash flow, capital expenditures and revenue from each company's 10-K filings on SEC EDGAR. Educational content only, not investment advice.
Frequently asked questions about economic moat stocks
What is an economic moat?
An economic moat is a lasting competitive advantage that lets a company keep earning high returns on its capital while rivals try to compete the profit away. Warren Buffett popularised the idea, and common sources of a moat are network effects, switching costs, low costs, brands and patents.
Can a moat be measured with numbers?
Not directly. A moat is a judgment about the future, and the filings only show the past. What the numbers can show is the footprint a moat tends to leave: high returns on capital that last, margins that hold in bad years and profit that arrives as cash. That is what this page ranks.
How does this page rank stocks?
Each stock runs five yes-or-no tests over five or ten fiscal years of 10-K data, and the page counts how many it passes. Ties are broken by average return on invested capital. It is a count of tests, not a hidden score, and every test is shown for every stock.
What are the five tests?
Returns on capital (at least 15% in 80% of years), operating margin at or above the sector median, margin stability (no margin more than 30% below an earlier peak, no loss year), cash backing (free cash flow positive every year and cash conversion of 90% or more) and light reinvestment (capex no more than 30% of operating cash flow).
What is a good return on invested capital?
There is no single bar. This page uses 15% after tax as the line a year has to reach, and the median stock is shown at the top for comparison. A business that earns well above its cost of capital for years is one rivals have not managed to copy.
Why is a stock missing from the list?
Banks, insurers, lenders, real-estate companies and utilities are left out because their returns come from lending, premiums or regulated building. Payment networks, exchanges and data firms are kept. Stocks without the full window of fiscal years with revenue, operating income, operating cash flow and capex on file are also left out. The footnote under the list gives the counts.
Does a strong footprint mean a stock is a buy?
No. It describes the past and says nothing about price. A great business can already be expensive, so pair the list with a valuation measure such as free cash flow yield, shown in each row's details and sortable in the list, before drawing any conclusion.
What does a widening or eroding moat mean?
Widening means return on capital rose at least 3 points and operating margin at least 1 point, comparing the last three years with the first three. Eroding means both fell by those amounts. It is the quickest way to spot a once-strong business under pressure.
Why do some stocks show n/a for return on capital?
Return on invested capital needs some capital to divide by. Negative equity from heavy buybacks counts as zero, so capital is the debt alone, and the row says so. A stock with no equity or debt figures for most years cannot run the returns test and can pass at most four of the five.
Is this the same as Morningstar's moat rating?
No. Morningstar analysts judge whether an advantage will last and rate it wide, narrow or none. This page uses no analyst judgment: it only counts tests on filed numbers, so a company can pass here and still have a fading advantage, or fail here and have a real one.
Read next
About the economic moat stocks list
An economic moat is a lasting competitive advantage. It cannot be read off a filing, but its footprint can: high returns on invested capital year after year, margins that hold, and profit that arrives as cash. This page runs five tests over five or ten fiscal years of 10-K data for every large US stock we track and counts the passes. It sits beside the Capital-Light Compounders list, which asks how little capital growth needs, and the Free Cash Flow Screener, which asks whether the profit became cash. The glossary defines each term.
Educational content only, not investment advice. A strong moat footprint describes the past and does not predict it, and a great business can already be priced for it. Pair this list with the free-cash-flow yield and the intrinsic value calculator.