These five companies spanning a range of sectors are tipped to provide good earnings growth over 2018 and beyond, according to Morningstar analysts.
All are regarded as holding economic moats of competitive advantage, stemming from at least one of the following sources: cost advantage, intangible assets, switching costs, efficient scale, or network effect.
For each of the following, we used our stock screener tool--available to Morningstar Premium subscribers--to determine which companies under Morningstar analyst coverage have strong earnings per share (EPS) growth expectations over the next year. 5. Food and beverage
Domino's Pizza (ASX: DMP), another narrow moat company, rounds out the list, with Morningstar pointing to strong sales in Europe and ongoing sales growth in Australia, New Zealand and Japan.
"Europe is the key growth region for Domino’s, and we estimate same store sales growth to average 4 per cent over the next five years," says Morningstar equity analyst, Johannes Faul.
"We forecast the European business to be as large as the Australia and New Zealand segment in terms of EBITDA by fiscal 2022, both regions accounting for 40 per cent of group EBITDA then," Faul says.
He notes Domino's limited capital requirements also translate into royalty payments, "making returns on investment capital very attractive."
"Brand and scale are key competitive advantages warranting a narrow economic moat rating, and future growth prospects are significant," Faul says.
"Despite significant growth during recent years, Domino's is by no means a mature business."
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