In this article, we will take a look at the 15 Best Wide Moat Dividend Stocks to Invest in.
Wide-moat stocks are companies with durable advantages that help them keep competitors at bay. According to an S&P Global report, a large market share can be a sign of a strong economic moat. In simple terms, this means the company controls a sizable portion of sales in its industry or market. That edge can come from scale, network effects, or strong brands. Still, market share alone doesn’t tell the full story. A dominant position doesn’t always lead to strong profits or a lasting competitive edge, so it needs to be weighed alongside other factors.
Companies with truly sustainable advantages usually show a clear quality bias. This shows up in stronger risk-adjusted returns and more defensive performance. The report looked at back-tested results for the S&P 500 Economic Moat Index, starting from June 28, 2013. From then through May 2024, companies with the widest moats outperformed the broader market, both in raw returns and after adjusting for risk.
Over that full period, the index delivered a risk-adjusted return of 1.10, compared with 0.91 for the S&P 500. It also experienced smaller drawdowns, reinforcing its defensive nature. That result makes sense, as wide-moat companies are typically higher-quality businesses that are better equipped to handle market stress and uncertainty.
Looking back, the index has also shown it can help smooth out volatility in most high-volatility periods. While it lagged by an average of 28 bps when the VIX was above 30, it outperformed by an average of 57 bps when the VIX ranged between 25 and 30, and by 72 bps when the VIX was between 20 and 25.
Given this, we will take a look at some of the best wide moat stocks to invest in.
Our Methodology:
To select wide-moat dividend stocks, we identified companies with durable competitive advantages and a strong history of rewarding shareholders. These advantages included brand strength, cost leadership, network effects, regulatory barriers, and high switching costs, all of which help protect a company from competition. We also considered holdings of VanEck Morningstar Wide Moat ETF, which tracks the performance of companies with sustainable competitive advantages according to Morningstar’s equity research team. Finally, we picked 15 companies that were most popular among hedge funds, as per Insider Monkey’s database of Q3 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
15. The Clorox Company (NYSE:CLX)
Number of Hedge Fund Holders: 37
On February 4, BofA analyst Anna Lizzul raised the firm’s price target on The Clorox Company (NYSE:CLX) to $112 from $110 and kept a Neutral rating on the stock. The move followed the company’s fiscal Q2 results, where adjusted EPS came in below the firm’s estimate after gross margins fell short due to higher costs. Looking to the second half of the year, the firm said it continues to hold “more tepid forecasts.” Lizzul pointed to uncertainty around whether consumption trends and margins will meaningfully improve.
Clorox missed market expectations for second-quarter profit on February 3. Shoppers have been trading down to cheaper alternatives as inflation continues to pressure household budgets. This shift has weighed on demand for branded cleaning products. It’s the kind of behavior many people notice firsthand in grocery stores, where private-label products are taking up more shelf space.
Budget-conscious consumers pulled back on purchases of floor cleaners and disinfecting sprays. That pressure showed up clearly in the Household segment, Clorox’s second-largest by revenue. The unit, which includes bags, wraps, and cat litter, reported a 54% drop in adjusted EBIT for the quarter. Higher manufacturing and logistics costs, along with lower net sales, drove the decline.
At the same time, the company has been pushing into new categories. The maker of Pine-Sol recently entered the ready-to-eat market with protein-focused snacks such as Hidden Valley Ranch Dippers & Toppers. Clorox is also moving forward with its $2.25 billion acquisition of GOJO Industries, the maker of Purell, to strengthen its presence in health and hygiene.
On an adjusted basis, Clorox earned $1.39 per share during the quarter, compared with estimates of $1.43, according to LSEG data. Revenue fell 1% year over year to $1.67 billion. Analysts had expected a steeper decline of 2.7% to $1.64 billion.
Management reaffirmed its full-year outlook, projecting a 6% to 10% drop in net sales and adjusted EPS in the range of $5.95 to $6.30. The company said earlier order fulfillment challenges, which hurt consumption and market share, are keeping expectations toward the lower end of that range.
The Clorox Company (NYSE:CLX) operates as a multinational manufacturer and marketer of consumer and professional products. Its business is organized into four segments: Health and Wellness, Household, Lifestyle, and International.
14. The Hershey Company (NYSE:HSY)
Number of Hedge Fund Holders: 46
On January 29, Deutsche Bank raised its price recommendation on The Hershey Company (NYSE:HSY) to $188 from $180. However, it reiterated a Hold rating on the stock ahead of the Q4 earnings report.
Earlier in the month, on January 15, the Wall Street Journal reported that the company had boosted its marketing budget for its Hershey’s brand by 20%. The increase supports the brand’s first new advertising campaign in eight years. Hershey spent about $600 million on advertising in 2024.
The campaign will run across traditional television and streaming platforms. It will also expand into areas where the brand has had less exposure. That includes influencer marketing on TikTok, live events, and promotions tied to major cultural moments, such as this year’s Winter Olympics and the America250 celebrations. The rollout is scheduled to begin next week.
Hershey said stronger performance at Hershey’s would benefit the broader company. Management views the brand as a core driver, and higher sales there tend to lift overall results. It’s the kind of focus large consumer companies often return to when growth slows, leaning on their most recognizable names.
The Hershey Company (NYSE:HSY) operates as a global snacks company with three main segments: North America Confectionery, North America Salty Snacks, and International.
13. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 50
On February 4, TD Cowen lifted its price target on Mondelez International, Inc. (NASDAQ:MDLZ) to $65 from $62 and maintained a Buy rating. The firm noted that management’s early outlook for 2026 came in below consensus, with organic growth projected at 0%–2%. That range reflects the risk that competitors could cut chocolate prices before Mondelez does, along with ongoing volume weakness in North America.
A Reuters report published a day earlier painted a similar picture. Mondelez is bracing for a slower year as repeated price hikes begin to push budget-conscious shoppers away at a time when living costs remain elevated, and economic uncertainty is still top of mind. In the US, especially, consumers are pulling back, gravitating toward cheaper channels and buying fewer items after multiple rounds of increases meant to offset soaring cocoa costs.
Cocoa prices jumped roughly 160% in 2024 before easing more recently due to a global surplus. Even so, the company has already locked in cocoa supply for 2026 at prices above today’s market levels, limiting its flexibility to roll back pricing in the near term.
CEO Dirk Van de Put said US consumer confidence remains fragile, with shoppers trading down and higher-income customers shifting toward so-called better-for-you snacks, particularly protein-focused options. He added that Europe is still on shaky footing, although chocolate volumes there are expected to steady after last year’s round of price increases.
Looking ahead, Mondelez expects organic net revenue growth in 2026 to range from flat to 2%, below the 3.84% increase analysts had been forecasting. Adjusted profit growth is projected at 0%–5%, compared with expectations of about 8.3%, according to LSEG data.
Mondelez International, Inc. (NASDAQ:MDLZ) operates as a global snack maker, with its core business centered on chocolate, biscuits, and baked snack products.
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