Value Line vs Morningstar 2024: Get Full Comparison

Value Line vs Morningstar Video

Value Line vs Morningstar: A Bit of Background Information

Morningstar and Value Line, both pioneering forces in the investment analysis field, have rich histories that have shaped their current reputations and methodologies. Established by Joe Mansueto in 1984 in Chicago, Morningstar quickly became known for its impartial mutual fund research.

Originally focusing on this area, the company has expanded its reach significantly. Today, it employs over 5,000 professionals across 27 countries who collectively analyze more than 620,000 investments, encompassing stocks, ETFs, and mutual funds. This expansion has solidified Morningstar’s role as a critical resource for both novice and seasoned investors.

On the other hand, Value Line was founded much earlier, in 1931, by Arnold Bernhard in New York City, in the wake of the devastating stock market crash of 1929. This crash had a personal impact on Bernhard, erasing his mother’s savings and prompting him to rethink stock analysis.

His experience at Moody’s Investors Service on Wall Street revealed to him the shortcomings of the prevalent analytical methods, which he found overly subjective and emotionally driven.

In response, Bernhard developed a new, more objective set of metrics to assess when stocks were over or undervalued, laying the foundation for Value Line’s approach to investment research.

Factor 1: Free Features Provided By Value Line And Morningstar

When you’re trying to compare the potential profitability of various investment vehicles, having some data is better than nothing at all. While both services offer basic data—like current performance—for free, you’ll need to pay for advanced features like full-fledged stock screeners or analyst ratings.

Value Line: Limited Free Data

Value Line platform allows free, non-registered users to access a limited selection of data for various assets, including price performance and investment return. However, more crucial data—like operating expenses or annual reports—is hidden behind the paywall of a premium membership.

Free users also have access to a small selection of articles, which provide general financial and investing information. Surprisingly, Value Line is offered, for free, at many public libraries. Check your local public library to see if they offer Value Line, you might be able to save a lot of money by making regular trips to the library.

Morningstar: More Robust Free Offerings

Morningstar provides more data for free than Value Line. Free users can enjoy unlimited access to the limited data for various assets, which should provide enough insight to predict if they’ll see an increase in investment value. Here are some of the features free users can access with Morningstar:

• Financial Health Grade: Assess a company’s financial stability with Morningstar’s financial health grade, which offers insights into the financial health of a company.
• Fundamental Analysis: Obtain basic fundamental data on companies, such as earnings per share (EPS), price-to-earnings (P/E) ratio, and revenue trends.
• Portfolio Quickrank: Compare and rank various investment funds using metrics such as performance, fees, and Morningstar ratings.
• Basic Company Data: Review key data for numerous publicly-traded companies, including stock price, trading volume, dividend yield, and more.
• Screeners: Use Morningstar’s screeners for stocks, ETFs, and mutual funds to filter investments by specific criteria. I must note that the basic screener does not include a dynamic stock scanner with ratings, sustainability, and returns. The “Similar Funds” feature suggests related investment options is also not accessible in the free, basic membership.
• Watchlist: Create a watchlist to monitor the performance and news updates of stocks, funds, and ETFs.
• News and Articles: Access a variety of news articles and analytical pieces that provide insights into market trends and individual companies.
• Discussion Boards: Engage with Morningstar’s community boards to exchange opinions, ask questions, and receive advice from fellow investors.

It should be noted that the free version of this online service does allow non-paying users to view articles, but the number they can view is extremely limited.

Factor 2: Comparing The Paid Features Of Morningstar and Value Line

Once you’re willing to pay for a service, you’ll instantly gain unlimited access to a wide variety of features that are helpful on your independent investment journey. Both of these services cover similar investment classes and offer comprehensive industry profiles, but what are the differences? Let’s find out.

Value Line: Expertly-Written Research Reports

This platform offers subscribers four main benefits: asset data, a stock screener, expertly-written research reports, and newsletters. Combined, these benefits can certainly be beneficial to your portfolio, although it’s important to note that Value Line focuses on long-term investing.

If you’re planning on holding assets for less than three years, Value Line’s information and advice will be less useful to you. Here is my complete breakdown of the paid features offered with a Value Line paid subscription:

• Summary and Index: This section provides a broad overview of the market with pre-set and customizable screens to help identify stocks based on criteria like price-to-earnings ratios, dividend yields, and revenue growth. This is particularly helpful for aligning selections with personal investment strategies, such as targeting high dividend yields for income-focused portfolios.
• Ratings and Reports: Covering about 1,700 companies, this segment offers detailed stock reports on a quarterly rotation. Each report includes current and historical financial data, earnings projections for up to five years, and an analyst’s outlook on the stock’s potential. Stocks are also rated on timeliness, safety, and technical metrics to aid in investment decisions.
• Weekly Selection and Opinion: Updated weekly, this portion delivers market commentary and an economic outlook. It reviews four model portfolios—each with a different investment focus, such as short-term growth or income—highlighting their successes and failures to provide real-world learning examples.

Morningstar: Features That Appeal To Any Investor

Many people subscribe to Morningstar simply for the analyst reports alone. However, while the analyst reports are indeed useful, this platform has so much more to offer subscribers!

Upon subscribing to Morningstar, you’ll have instant access to a variety of premium features. Let’s take a closer look at the bevy of features premium Morningstar subscribers gain access to:

• Independent Analyst Ratings: With a team of over 150 analysts, Morningstar Investor provides unbiased, thorough ratings that help investors cut through market noise and concentrate on the most impactful aspects of investments.
• ESG Ratings: Morningstar offers ESG ratings to support socially conscious investing, aiding investors in finding companies with strong environmental, social, and governance practices that also aim to deliver superior returns.
• Diverse Screening Tools: The platform includes screening tools that utilize detailed performance and valuation metrics, allowing for the creation of personalized investment strategies across a vast array of products.
• Account Aggregation: Morningstar Investor enhances portfolio management by integrating all your investment accounts, offering a seamless and continuous overview of your assets.
• Portfolio X-Ray: Utilizing the Portfolio X-Ray tool, investors can gain a comprehensive understanding of their portfolio’s makeup, including asset allocation, sector weightings, fees, and stock statistics, which assists in identifying strengths and potential risks.

Curious about the user-friendliness of Morningstar? Here is a screenshot of the Portfolio X-Ray dashboard. As you can see, it is very informative but not overwhelming or cluttered.

Click here for a full review that covers all the capabilities of Morningstar and the Morningstar Investment Research Center.

If you are ready to explore these powerful benefits for yourself, Click Here to get started today.

Factor 3: Proprietary Rating System Comparison

Morningstar: Star Ratings

Morningstar uses a star rating system to assess mutual funds and ETFs, assigning one to five stars based on past performance that considers both returns and risks. This method calculates the Morningstar Risk-Adjusted Return, where the top 10% of funds in each category earn five stars, the next 22.5% earn four stars, and so on.

This tiered rating is recalculated monthly to reflect recent fund performance changes. While these ratings provide a historical performance snapshot, Morningstar advises that they serve as a starting point for deeper research, not as standalone investment advice.

Investors are encouraged to look beyond the stars to consider fund management, fees, and whether a fund fits their investment goals and risk tolerance.

Click Here to incorporate Morningstar’s coveted Star Ratings into your investment decisions.

Value Line: Timeliness Rankings

Value Line’s approach, on the other hand, centers around its unique Timeliness® ranking system which evaluates stocks based on their expected price performance over the next six to twelve months.

Stocks are ranked from 1 to 5, with 1 indicating the highest potential for price appreciation. This ranking system covers around 1,700 stocks and categorizes them into five groups, from “Top 100” to “Lowest rated 100,” reflecting their expected performance. In addition to Timeliness®, Value Line also assesses stocks based on Safety and Technical measures, providing a multifaceted view of potential investment risks and returns.

These rankings are particularly useful for investors looking to balance their portfolios with stocks positioned for short-term gains, suggesting sell actions for stocks dropping to rankings of 4 or 5.

Factor 4: Subscription Costs

In this category, there’s a clear winner. However, just because one platform is cheaper than the other doesn’t necessarily mean it’s not worth the asking price. Ultimately, you should spend your money on the service that best serves your needs (not the one that costs the least).

Value Line: Dynamic Pricing Structure

A membership to Value Line will cost you $598 per year. This is the price for either the digital version or the print version. A membership for both versions will cost you $718 per year.

However, depending on the financial markets and private companies you want, this price could increase or decrease, as Value Line offers a wide variety of membership plans with different primary sources for coverage.

Morningstar: Straightforward And Affordable Pricing

Unlike Value Line, getting unlimited access to Morningstar is a fairly simple process. There’s a single membership offer, which you can pay for by month or by the year. If you opt for monthly billing, expect to pay $34.95/month.

However, you can save a significant amount by opting to pay for the entire year upfront. This will cost you $249 per year, as opposed to the $419.40 per year you’ll end up paying if you opt for the monthly option.

Save $50 on an annual membership with coupon code MM50

Factor 5: External Customer Reviews & Ratings

External Value Line Reviews & Ratings

External Morningstar Reviews & Ratings

Value Line vs Morningstar: Final Thoughts

Although neither service functions as a complete replacement for a dedicated financial advisor, each one brings a lot of useful data, insights, and recommendations to the table.

I think that Value Line itself is a great service: it’s just a bit overpriced! I’d recommend going with a Morningstar membership instead.

Click here to save $50 with coupon code MM50 on your first year of Morningstar!

Learn More About Morningstar