An updated edition of the November 12, 2025 article.

In the business world, the concept of a wide moat refers to companies with strong, durable competitive advantages that protect them from rivals, much like a moat defends a castle. First popularized by Warren Buffett, this strategy emphasizes investing in businesses that can sustain superior profitability over the long term due to their unique positioning, strong brand loyalty, cost advantages, network effects or regulatory barriers.
 
Among the companies that are recognized for their wide moats, some are The Estee Lauder Companies Inc. (EL Quick QuoteEL - Free Report) , Caterpillar Inc. (CAT Quick QuoteCAT - Free Report) and S&P Global Inc. (SPGI Quick QuoteSPGI - Free Report) . These companies operate in industries with high barriers to entry, making it difficult for rivals to challenge their positions and ensure consistent revenue growth.

Wide-moat companies typically benefit from several key factors, such as brand strength, network effects, high customer switching costs, regulatory protections, and economies of scale. These characteristics make it challenging for new entrants or existing competitors to erode their market share. Companies with wide moats typically benefit from strong pricing power, stable profit margins, and the capacity to reinvest in their businesses, further reinforcing their competitive advantages.

The case for investing in wide-moat businesses is rooted in their ability to deliver steady, long-term returns. In contrast to companies operating in fiercely competitive industries, where profits can be highly volatile due to pricing pressures and rivalry, wide-moat businesses tend to show greater resilience during economic downturns and market turbulence. Their solid market positions and robust balance sheets enable them to endure challenges that might seriously impact less competitive firms.

Investing in wide-moat companies can be an effective strategy for building long-term wealth, as these businesses typically produce steady cash flows, navigate market volatility with resilience, and deliver value to shareholders through dividends and stock price growth. While no investment is entirely risk-free, companies with strong economic moats provide a level of durability that many investors seek in an ever-changing market. Our Wide Moat Screen makes it easy to identify high-potential stocks at any given time — just like the ones mentioned above. 

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3 Wide-Moat Stocks to Buy Now

Estee Lauder is one of the world's leading manufacturers and marketers of skin care, makeup, fragrance and hair care products. Its strategy centers on strengthening its core brands, including Estee Lauder, Clinique, La Mer and MAC, while sharpening its focus on skincare, which remains the most resilient and margin-accretive segment of beauty.

EL is focused on rebuilding profitability through its expanded Profit Recovery and Growth Plan (“PRGP”), which aims to restore margins while supporting sustainable sales growth. The PRGP is a pivotal initiative designed to address the company's current profitability challenges and drive future growth. It focuses on three primary benefit areas — accelerating margin expansion, fueling growth with targeted investments and simplifying processes to enhance agility. 

Estee Lauder’s "Beauty Reimagined" is an ambitious strategic vision designed to restore sustainable sales growth and achieve a solid double-digit adjusted operating margin in the coming years. This initiative aims to position the company as the leading consumer-centric prestige beauty brand. The company is undergoing a significant transformation of its operating model to become leaner, faster and more agile while taking decisive actions to expand consumer reach, accelerate innovation and increase investments in consumer-facing areas.

EL’s online business remains a critical multi-year growth engine, and the first quarter of fiscal 2026 results demonstrated meaningful acceleration as global online organic sales grew double digits. Digital remains a key growth driver of this Zacks Rank #2 (Buy) stock, supported by social commerce, broader online distribution and a new Shopify partnership. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Caterpillar, known for its iconic yellow machines, is the largest global construction and mining equipment manufacturer. Given that it serves a gamut of sectors — infrastructure, construction, mining, oil & gas and transportation, the company is considered a bellwether of the global economy.

CAT stands to benefit from the surge in projects, driven by the United States Infrastructure Investment and Jobs Act, creating opportunities for its diverse construction equipment portfolio. The shift toward clean energy will drive the demand for essential commodities, boosting the need for Caterpillar’s mining equipment. Meanwhile, given their efficiency and safety, CAT’s autonomous fleet is gaining momentum among miners. 

As technology companies establish data centers globally to support their generative artificial intelligence (AI) applications, the company is witnessing robust order levels for reciprocating engines for data centers. It is planning to double its output with a multi-year capital investment. Caterpillar recently entered into a long-term strategic collaboration with Hunt Energy Company, L.P., to meet the surging power needs of data centers. The first project is planned for Texas and is expected to serve as the launchpad for a multi-year program to deliver up to one gigawatt of power generation capacity for data centers across North America. 

Caterpillar, a Zacks Rank #2 stock, has also entered into an agreement to develop advanced energy optimization solutions for data centers. This collaboration focuses on integrating Vertiv's power distribution and cooling portfolio with Caterpillar’s know-how in power generation and CCHP (Combined Cooling, Heat and Power). 

S&P Global, a leader in financial information and credit ratings, benefits from an economic moat driven by its brand strength, regulatory influence and data-driven services. Its credit rating business is essential for businesses, governments and investors, as its ratings are widely recognized and are often required to issue bonds. 

The company’s proprietary financial data, benchmarks and analytics services provide indispensable tools for market participants, ensuring customer reliance on its offerings. Due to the trust and credibility S&P Global has built over decades, new competitors struggle to enter the space, giving the company pricing power and a stable revenue stream from subscription-based services.

This Zacks Rank #2 company is benefiting from the growing demand for business information services. The constantly increasing volume of data from private and government organizations has augmented the demand for improved enterprise-wide financial performance visibility. Higher demand for news, information and analytics solutions will drive the growth of the market. 

Further, the industry is benefiting from the rising demand for risk mitigation. Changes in market dynamics are more or less a constant phenomenon, keeping companies exposed to credit fund and operational risks. Accurate market and financial information is required for risk mitigation, and this would spur demand for business information services.