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Susan Dziubinski: I’m Susan Dziubinski with Morningstar. Morningstar recently published its updated list of the Best Companies to Own for 2025. What qualities must a company have to make the list? For starters, we’re looking for companies that have significant competitive advantages that will allow them to thrive over decades. We’re also looking for businesses that generate reliable cash flows. And we favor management teams that have made adept capital allocation decisions.
Today we’re looking at three of the new companies that joined the list for 2025. Before we dig in, a quick reminder that a great company isn’t necessarily a great stock to buy right now. We think it’s important that investors buy companies—even great ones—only when their stocks are trading below what they’re actually worth.
3 of the Best Companies to Own in 2025 and Beyond
Danaher DHRPaychex PAYXEquifax EFX
The first of our best companies to own in 2025 and beyond is Danaher. Danaher focuses primarily on manufacturing scientific instruments and consumables in the life science and diagnostic industries. Like all the names on our best companies list, Morningstar thinks Danaher has carved out a wide economic moat, thanks to the company’s differentiated technology that is protected by various intangible assets, including patents, brands, copyrights, and trademarks. And we think management has done an exceptional job of executing an acquisition-focused strategy that contributed to the company becoming a top-five player in the highly fragmented and relatively sticky life sciences and diagnostic tools market. We think Danaher stock is worth $285.
Read Morningstar’s full report on Danaher.
The next name that’s new to our list of best companies to own in 2025 is Paychex. Paychex is a leading provider of payroll, human capital management, and insurance solutions servicing small and midsize clients. The firm’s wide economic moat is derived from high customer switching costs. Paychex also benefits from brand strength that it has built over time, an extensive referral network, and cost advantages due to economies of scale. Management has an excellent track record of investment and acquisitions, and we expect Paychex to continue to take a greater share of clients’ wallets over time. We think the stock is worth $130.
Read Morningstar’s full report on Paychex.
The final newcomer to our best companies to own list for 2025 is Equifax. Equifax is one of the Big Three US credit bureaus. Given the fixed costs inherent in a data-intensive business, Equifax has been able to enjoy strong operating leverage from incremental revenue. We think the company has carved out a wide economic moat. We believe the barriers to entering the credit bureau business are high because replicating a database of millions of customers’ data would be incredibly difficult. We think management’s acquisitions over time strengthen Equifax’s moat and diversify its revenue. We think Equifax stock is worth $285.
Read Morningstar’s full report on Equifax.
To learn more about Morningstar’s Best Companies to Own list, be sure to visit Morningstar.com.
Morningstar director Eric Compton, senior analyst Julie Utterback, and analyst Rajiv Bhatia provided the research behind this segment.
Watch 2 Stocks Top Global Fund Managers Have Been Buying for more from Susan Dziubinski.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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