Recently, The Vanguard Group announced that several of its flagship funds are undergoing name changes. The Vanguard Total Stock Market Index Fund ETF will become the Vanguard Morningstar Total Stock Market ETF, while the Vanguard Growth Index Fund ETF will rebrand as the Vanguard Morningstar Growth ETF.

Why the switch?

Morningstar, Inc. ($MORN) recently purchased the Center for Research in Security Prices (CRSP), which provides the indexes used by Vanguard.

That means Morningstar will now provide benchmark data used by The Vanguard Group, the world’s largest index fund company, for some of its biggest funds and ETFs. Coincidentally, Morningstar is also a dividend stock trading near its 52-week lows.

That caught my attention, and today’s report looks at what Morningstar actually does and whether the company could be an undervalued income-growth opportunity.

Morningstar, Inc. provides investment research, data, and asset management services. The company offers insights on more than 350,000 stocks, mutual funds, and ETFs. Depending on your brokerage platform, you may already receive free Morningstar reports or see the company’s well-known star ratings attached to specific funds and assets.

Financial data and service providers have been hammered this year due to Wall Street’s fears surrounding AI disruption. Morningstar is no exception, with shares down 42% over the past 12 months.

I love AI. I think it’s a major breakthrough that everyone should learn to leverage, and I’m a strong advocate for its time-saving benefits when it comes to research and content creation. But AI still follows the old “garbage in, garbage out” principle that has always limited computing.

Anecdotally, a few days ago I used an AI platform to help with some niche research related to writing and publishing. The program generated a long list of suggestions that I, someone with experience in the industry, immediately recognized as poor opportunities. After digging deeper, I realized the scraped “data” largely came from Medium articles written by people copying one another while recycling the same oversaturated niche ideas that are both highly competitive and low demand.

“Algorithms are going to replace everyone’s payroll” or “AI will completely replace stock analysts” sounds plausible until you consider the stakes involved. It’s the same argument people once made about Google replacing doctors or lawyers. At a certain level, knowledge and experience still matter. Trillion-dollar companies and billion-dollar funds will continue relying on professional guidance from seasoned experts.

That fear has also created a unique opportunity. Many companies that historically traded at premium valuations are now priced below the general market.

Morningstar is one example. The stock currently trades at a price to earnings ratio of 14.95 while offering a 1.12% starting yield backed by a 5-year compound annual dividend growth rate of 9.20% and a conservative payout ratio of just 17.57%.

With shares down significantly over the past 52 weeks, Morningstar’s 10-year average annual total return has fallen to a lackluster 8.83%.

However, from May 8, 2015 through May 8, 2025, the stock delivered a market-beating average annual total return of 15.92%.

Many libraries pay for Morningstar subscriptions. Major brokerage platforms license the company’s services, and numerous asset managers use Morningstar indexes and data to construct ETFs and index funds.

While investment research and financial data may not represent as strong of a moat as shareholder compliance services for publicly traded companies (like the services provided by Broadridge Financial Solutions, Inc. to firms such as Colgate and Morgan Stanley) I still believe Morningstar is a high-quality business that the market has “marked for death” due to AI fears.

The company has a low payout ratio, a steadily growing dividend that consistently outpaces inflation, and a valuation that looks more like an electric utility than a financial services company.

That combination, along with the recent acquisition of CRSP, makes me extremely interested in adding Morningstar to my portfolio.

That’s 6 sales in 7 months. 29 all time. And the performance?

16.5%, 17.6%, and 17.8%, net annualized returns on sold works held longer than one year (See all 29 at Masterworks.com)

It’s not from stocks, private equity, or real estate… it’s from contemporary and post war art. Crazy, right?

With Masterworks, you don’t need to be a BILLIONAIRE to invest in multi-million dollar art anymore.

Historically, the segment overall has had attractive appreciation and low correlation to stocks.*

Masterworks targets works featuring legends like Banksy, Basquiat, and Picasso, identifying what they believe to have significant long-term appreciation potential, not just at the artist level but at the level of individual artworks.

As one of the largest players in the art market, with $1.3 billion invested over 500 artworks, they pass critical advantages through to their 70,000+ members to add art to their portfolios strategically.

Looking to diversify your investments in 2026?

Click here to skip the waitlist

^{*According to Masterworks data. Investing involves risk. Past performance is not indicative of future returns. See important Reg A disclosures at masterworks.com/cd.}

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.