Morningstar Stock Price, News & Analysis

Morningstar published its biannual Global Investor Experience report, revealing significant insights into mutual fund disclosure practices across 26 markets. India and the U.S. received Top grades for their transparency in managing investor information. The report introduced two new dimensions: Sales Disclosure and ESG and Stewardship Disclosure, highlighting a growing emphasis on environmental factors. Conversely, Australia was noted for having the weakest disclosure regime, lacking regulated portfolio holdings disclosure, which has not adapted to modern investor expectations.

Morningstar declared a quarterly dividend of 31.5 cents per share, a 5% increase from the previous rate of 30 cents, effective Jan. 29, 2021. This raises the annualized dividend to $1.26, up from $1.20. The board also approved a new $400 million share repurchase program effective Jan. 1, 2021. Morningstar aims to enhance shareholder value by repurchasing shares at prevailing market prices. This marks the 10th consecutive year of dividend increases, reflecting the company's resilience and commitment to sustainable growth.

Morningstar, Inc. (Nasdaq: MORN) reported that U.S. mutual funds and ETFs attracted $13 billion in October 2020, maintaining consistent inflows for seven consecutive months. However, U.S. equity funds faced significant outflows of $46 billion, primarily affecting actively managed funds. In contrast, taxable-bond funds saw robust inflows of $62 billion, with total year-to-date inflows reaching $316 billion. Vanguard led fund families with inflows of $12.8 billion, while SPDR experienced the largest outflows at $7 billion.

Morningstar reported a strong third quarter for 2020, with revenue rising by 13.8% to $357.2 million, and organic revenue growth of 8.0%. Operating income saw a decline of 10.7% to $44.3 million, while adjusted operating income soared 42.3% year-over-year. Diluted net income per share increased 54.4% to $1.76, boosted by a $1.18 gain from Sustainalytics. Cash flow from operations dropped 11.6%, and free cash flow fell 17.3%. Total assets under management rose 15.6% to $170.3 billion.

Morningstar updates ratings for 61 of the largest 529 college-savings plans, covering about 97% of $363 billion in assets as of August 30, 2020. Analysts assigned three Gold, 10 Silver, 22 Bronze, 18 Neutral, and eight Negative ratings. Key trends include slowing asset growth and increased cost-cutting among plans. Enhanced rating methodology prioritizes pricing assessments, resulting in downgrades for high-fee advisor-sold plans and upgrades for lower-fee direct-sold plans. Overall, 12 plans were upgraded, while 15 were downgraded, with adjustments in coverage for several plans.

Morningstar, Inc. (Nasdaq: MORN) is reorganizing its research structure, effective Jan. 1, 2021. This includes merging quantitative and qualitative research teams and appointing a chief ratings officer to enhance ratings integrity. Lee Davidson will lead these combined teams, while Jeffrey Ptak will assume the chief ratings officer role, overseeing new rating methodologies. Morningstar aims to improve investor services by integrating qualitative insights with quantitative analytics as it expands its investment offerings across multiple asset classes.

Morningstar reported significant disparities in U.S. mutual fund and ETF flows for September 2020. Long-term mutual funds faced outflows of $317 billion year-to-date, while ETFs saw inflows of $313 billion, marking the widest gap since 1993. In September alone, mutual funds had $22 billion of outflows compared to ETFs' $34 billion inflows. Notably, taxable-bond funds led with inflows of $39 billion. However, U.S. equity funds experienced $21 billion in outflows, contributing to a record quarterly loss of $119 billion.

Morningstar published its fourth annual study on Health Savings Accounts (HSAs), assessing 11 leading providers. The study highlights improvements in provider quality, with notable fee reductions and better investment options. Fidelity stands out as the top choice for both spending and investment accounts. Total industry HSA assets grew by 11% to approximately $73.5 billion in 2020. Despite these advancements, the need for greater fee transparency and improved investment access remains. The study emphasizes the importance of evolving HSA offerings in a changing market.