Conglomerates & Holding Companies covers diversified industrial conglomerates and holding companies. MoatScope covers 12 companies here. Two have a wide moat, three a narrow moat and seven none.
How the industry makes money
These companies own many businesses and allocate capital among them. The strongest acquire or build durable businesses and let them compound; the weaker ones trade at a discount because the whole is worth less than its parts.
Where the moats are
- Berkshire Hathaway: a vast portfolio of wholly owned businesses, led by GEICO and other insurers, whose cost advantages and scale are hard to match.
- Honeywell: aerospace, automation and building technologies built into customers' systems.
The narrow-moat group is 3M, Loews and Brookfield Business. Icahn Enterprises, Seaboard and Cannae carry no moat.
What wears moats down
Poor capital allocation, holding-company costs and businesses that no longer fit together can erode value, which is why many conglomerates break themselves up.
What to watch
- Breakups, spin-offs and acquisitions.
- Capital allocation and buybacks.
- Performance of each business unit.
Moat ratings and quality scores on this page update as companies report. Price versus fair value for every company in the industry is in the screener.