Morningstar, Inc.

Management has a mixed‑to‑good record of value creation via acquisitions and organic investment. PitchBook, DBRS, and Sustainalytics expanded the firm’s relevance; 2025 bolt‑ons include DealX and Lumonic. Shareholder returns include a regular dividend and notable buybacks in 1H 2025, while the CRSP deal aims to scale Morningstar Indexes.

Stock‑based compensation was 54.7 million in 2024, manageable against scale, with buybacks helping offset dilution. We view the CRSP price as strategic but not risk‑free given client concentration and fee sensitivity.

Checklist snapshot with scores and brief rationale: 1) Moat durability 90 strong multi‑moat; 2) Returns on capital 75 improving post‑investment phase; 3) Rev and FCF growth 80 consistent double‑digit decade CAGR; 4) Margins 78 healthy and expanding; 5) Owner‑CEO 85 founder‑led board with aligned CEO; 6) Simplicity 75 diversified but understandable; 7) Debt 80 low net leverage; 8) Dilution 75 SBC moderate, offset by buybacks; 9) Jurisdiction 90 US based, global footprint; 10) Trend alignment 80 positioned for private markets, indexing, advice tech; 11) Superinvestor fit 80 classic toll‑booth data economics; 12) Valuation 60 attractive at the right FCF yield.