Using stock market research services can help even experienced investors make better stock picks. But with so many options out there, how do you know which stock picking service to choose?
Motley Fool Stock Advisor and Morningstar are among the best stock picking services out there. Here is a head-to-head comparison between the two to learn which might be the best choice for what you need.
So, without anything further, let’s dive in and see which is better – Motley Fool vs. Morningstar!
- About Motley Fool Stock Advisor
- Motley Fool Services
- Starter Stocks
- Motley Fool Pros and Cons
- About Morningstar
- Morningstar Services
- Morningstar Pros and Cons
- Motley Fool vs. Morningstar: Similarities
- Motley Fool vs. Morningstar: Differences
- Motley Fool vs. Morningstar: A Rundown
- Motley Fools vs. Morningstar: The Winner
About Motley Fool Stock Advisor
Founded by brothers Tom and David Gardner in 1993, Motley Fool has over 700,000 subscribers to their newsletter. Motley Fool has designed its services for investors at every level, which makes them especially user-friendly.
Motley Fool’s Stock Advisor is a stock picking service which means that their analysts will conduct in-depth research on a collection of stocks. Motley Fool makes stock recommendations to their subscribers on a monthly basis.
How Motley Fool Works
The Motley Fool website has resources that new and seasoned investors can utilize. This free service includes information about how to invest, different investing styles, and much more.
There’s also detailed information about the stock market and index that you can find as well. Motley Fool Stock Advisor is their flagship service that also happens to be their most basic plan.
You can sign up for Motley Fool Stock Advisor for $99 your first year. This also includes their 30-day money-back guarantee.
Motley Fool Services
Two New Stock Picks Each Month
As a Motley Fool Stock Advisor subscriber, you’ll receive a new stock pick every two weeks. These handpicked stocks follow the company’s long-term, buy-and-hold approach.
Their investment advice is that their investors should hold these stock recommendations for a period of three to five years. Each Motley Fool stock pick is released on the first and third Thursday of each month.
Premium subscribers can access the latest stock recommendations by logging in to their account portal. These stock picks (including sell recommendations) can also be set up to be received as an email or text alert.
This premium subscription also includes their “Start Stocks” guide. This is perfect for the newbie investor to help them build their first portfolio.
Updated once a year, these starter investments create model portfolios with 10 stocks that are chosen specifically for new investors.
Best Stocks to Buy Now
If those aren’t enough investment picks for you, then Motley Fool offers its “Best Buys” guide. These are ten stocks that Motley Fool believes are best to buy today, based on their analyst reports.
Previously Recommended Stocks
Motley Fool Stock Advisor subscribers can also review their investment portfolio of previously recommended stocks. This provides transparency on their track record.
You can clearly see which stock picks were winners, along with the losers. It really demonstrates how Motley Fool focuses on transparency in their performance by not hiding when they have made a mistake.
Stock Advisor Community Board
With your subscription to Motley Fool Stock Advisor, you also get access to their investment community. The active community will answer questions that others pose and a source for investing tips.
It can also be used as part of your research tools for your own investments. There is a discussion board that’s dedicated to roughly 100 of the most popular stocks.
Other Premium Investment Services
In addition to their Stock Advisor bundle, Motley Fool offers their Rule Breakers service. Motley Fool Rule Breakers includes high-growth stock recommendations that David Gardner selects.
Rule Breakers includes the following:
- 2 Stock Picks per month
- Best Buys Now
- Starter Stocks
- Access to Motley Fool’s investment community
Their Rule Breakers service is great for intermediate investors who are looking for high-growth investment options.
Motley Fool’s services are geared towards being self-service. You shouldn’t have a need to contact their customer service unless you have a payment or billing issue.
Customers can contact their customer service through email or giving them a call from 9 a.m. to 5 p.m. eastern time (Monday through Friday).
They also have a help center that customers can find answers to general questions.
Motley Fool Pros and Cons
- Motley Fool provides transparent information on their historical data which skews towards a record of returns
- Stock Advisor’s stock picks have consistently demonstrated higher returns than the S&P 500
- Their individual stock analysis is highly detailed, enabling investors to make easier decisions
- Investors still need to do their due diligence on Motley Fool’s stock picks because of the risky nature of investing in stocks
- Not intended for short-term investors
- Very limited information on mutual funds
Morningstar is an investment research firm that is located in Chicago. Founded in 1984 Morningstar has earned the reputation of being one of the most influential players in the industry.
With its stellar track record, Morningstar has more than $220 billion in assets under management.
Morningstar offers their star rating which is a measure of a fund’s risk that’s adjusted to the return relative to other comparable funds. These credit ratings range from 1 to 5 stars, with 5 being the best performers.
Morningstar Premium is what we’ll be reviewing against Motley Fool’s Stock Advisor service. It provides access to research, portfolio-building tools, and analysis for self-directed investors.
Morningstar premium pricing costs $199 for an annual membership.
How Morningstar Works
The primary focus of Morningstar Premium is mutual funds. Morningstar also provides ratings and analyst reports on securities like stocks, bonds, and exchange-traded funds (ETFs).
If you’re looking to invest money for the long term, Morningstar Premium could be a good fit for your financial planning needs. Their investment expertise is very much catered to investors looking for mutual fund recommendations.
Morningstar analysts provide a detailed look at what they think about an investment. Their extensive analyst report has a ton of information, but you can find the most valuable in their Full Analysis section.
- Business Strategy and Outlook
- Economic Moat
- Analyst note
- Risk and Uncertainty
- Fair Value and Profit Drivers
If you didn’t know about certain individual stocks or an exchange-traded fund, this is among the best research tools to get up to speed quickly.
Best Investments and Fund Analysis
If you need some investment ideas on what are the best funds to include in your portfolio, this Morningstar Premium feature can help.
They have categories like individual stocks, ETFs, mutual funds, bond index funds, and much more
You can track your investments, create watch lists, and review your strategy using this Morningstar Premium feature. Use this tool to take a hands-on approach and easily review your portfolio.
Using this portfolio tool, you can evaluate your asset allocation and sector weightings in your portfolio. This allows you to see if you have concentrations in certain positions.
It also looks at the stock holdings in your mutual funds so you can prevent having the same companies in your portfolio.
A subscription with Morningstar Premium will also include their mutual fund screeners feature. The “Basic Fund Screener” allows you to search mutual funds by performance, ratings, or category.
Morningstar’s “Premium Fund Screener” will allow you to search mutual funds by analyst grade rating, performance, or category.
Other criteria such as annual returns, load adjusted returns, tax cost ratio, and risk can also be filtered.
Their “Similar Funds” feature will give you a list of mutual funds that are comparable to your target fund. If you’re looking at performing tax-loss harvesting to lower your capital gains tax, this feature is especially helpful.
Like Motley Fool, Morningstar’s services are focused on being a self-serve platform.
Morningstar does provide phone and email contact options. They also have a help center that customers can use to help find answers to their questions.
Morningstar Pros and Cons
- You always have the latest information as Morningstar updates its ratings regularly
- The information, analysis, and ratings are from a widely reputed source
- There are a pleater of tools that users can leverage for their mutual stock and stock analysis
- Can narrow down from a large set of mutual funds to a few that match your criteria using their fund screener tools
- Offers a mobile app for iOS and Android devices
- Morningstar Premium caters to mutual funds; There’s not as much focus on ETFs and individual stocks
- Screener tools are not as user-friendly as they could be
- Their basic version doesn’t offer much value so you generally have to upgrade to their premium service
Motley Fool vs. Morningstar: Similarities
Both of these companies have certain aspects that make them very similar to each other. These include:
- Both of these companies have been around for a long time and built a solid reputation among investors
- Both premium investment services that have similar price points
- Motley Fool and Morningstar both send out regular newsletters and you can log in to their website to view investment research and recommendations
- Have access to additional reports, educational content like money tips to help in your path to financial freedom, tools, and more
Motley Fool vs. Morningstar: Differences
The similarities largely end there. Their services appeal to different types of investors. Differences between Motley Fool Stock Advisor and Morningstar include:
- Stock Advisor is focused on stocks
- The approach that Motley Fool takes to the stock market is humorous and fun
- Morningstar takes a very serious approach with access to a ton of data that’s helpful for investors researching funds
- Morningstar focuses on mutual funds
Motley Fool vs. Morningstar: A Rundown
As you can see, Motley Fool and Morningstar have their similarities, differences, pros, and cons. Each of them shines in different ways. Let’s break them down here.
Motley Fool vs. Morningstar: Stock Market Recommendations
Motley Fool has a proven track record when we’re talking about investment performance. They have made stock picks like NVIDIA, Shopify, and Activation Blizzard before everyone knew about them.
Stock Advisor has beaten the S&P 500 on a regular basis. In the past five years, Stock Advisor performed more than three times higher than the S&P 500.
Morningstar doesn’t provide recommendations on stock picks. They update their list of stocks only when there’s a change in analyst’s ratings.
You will need to do more research and follow stock news to buy and sell stocks appropriately. Therefore, if you are an investor that’s mostly interested in stocks, Morningstar won’t be a great resource.
Motley Fool is the clear winner in this category.
Motley Fool vs. Morningstar: Mutual Funds
If you’re searching for information on a specific mutual fund, you won’t have much luck with Stock Advisor. Motley Fool offers very limited information on mutual funds.
This is in stark contrast to Morningstar. They provide a list of recommended funds and bonds to consider investing in.
Their rating system is a valuable and widely accepted tool for long-term investors.
Morningstar wins in this category.
Motley Fool vs. Morningstar: Frequency
Morningstar provides you with insights that you can review daily. If this is the method you prefer, then Morningstar may appeal more to you.
You may have to shift through their articles (which they have plenty of) to make an informed decision though. They basically provide their list of top picks without much background information.
Motley Fool is a twice a monthly publication that highlights two stocks per month. Their newsletters really dive in deep so you get a ton of information about why they are recommending a stock.
Investors who like to make a few trades each month may prefer this style.
Since it depends on the investor’s personal preference on the frequency of information, Motley Fool and Morningstar are a tie in this category.
Motley Fool vs. Morningstar: Investment Portfolio
Morningstar provides daily updates that cover assets such as mutual funds, ETFs, and individual stocks. This allows you to build a wide investment portfolio.
If you’re open to trying things other than stocks, Morningstar can fill your needs.
With Motley Fool’s Stock Advisor service, you are working with a stocks-only platform. They are obviously good at their stock advice given their history.
While they may only focus on stocks, Stock Advisor is able to go really deep and give you refined insights.
This is another category that goes back to the preference of the investor, which makes it a tie.
Motley Fool vs. Morningstar: Research Tools
Other than the detailed stock picks that Motley Fool makes, there isn’t much for research tools. So if you want to take a hands-on approach with tools like daily updates, live trading, etc. that can help you find stocks yourself, they aren’t there.
You’ll have a lot more research tools at your disposal with Morningstar. Their recommendation lists also have good fundamental information and you can find detailed news items using their service.
Morningstar takes the win in the research tools category.
Motley Fool vs. Morningstar: Pricing
Stock Advisor is available for $99 your first year, then $199 thereafter. This tier is great for anyone who wants to get into investing in stocks.
Neither of these rivals is particularly expensive. The additional tiers that Motley Fool offers do allow you to access more stock picks, information, etc.
However, when looking at these two side by side, they are a tie in the pricing category.
Motley Fools vs. Morningstar: The Winner
So when you take everything into consideration, which of these services is the winner. The answer is that there’s not one.
You can’t exactly compare these two investment services because they have some stark differences. When you make these considerations, there’s simply not a clear winner.
Motley Fool’s Stock Advisor service is going to appeal to a certain type of investor. The same thing can be said about Morningstar and its premium offering.
So how do you know which of them to choose?
Should I pick Motley Fool?
Investors who have a semi-active trading style will be a good fit for a Stock Advisor subscription. Ideally, you are interested in a very specialized stock picking service.
For beginners, Stock Advisor is a great place to start for building a portfolio. Their service becomes more limited however if you have some experience or enjoy experimenting.
More advanced investors will most likely need to look at their other tiers to get what they want. But that’s at a much higher cost. If you’re still itching to learn more, you can read our complete review of Motley Fool Stock Advisor here.
Should I pick Morningstar?
Morningstar Premium has a lot more diversity than Stock Advisor. You will get a list of suggestions, but they aren’t actual picks.
Plus you’ll have to do more research to determine whether or not to invest. At least they do provide some research tools that you can use to make those decisions.
If you’re more interested in investing in funds, Morningstar will also be more suitable for your needs.