Zacks vs Morningstar: Which Is Better For Investment Advice?

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Investing papers on a desk next to computer (caption: Zacks vs Morningstar)Are you looking for investment advice from reputable experts? Some top online research and advice sites can save you a ton of money rather than going with a financial advisor. You may have heard of two of the most popular, Morningstar and Zacks Investment Research.

What does each service offer and how are they different? We’ll give you the lowdown to help you decide if one of these reputable sites is a good fit for your investing needs.

Reliability & Reputation

Both Zacks and Morningstar have been around for decades and have grown into two of the most popular investment research and advice sites. Zacks’ team of experts focuses on stocks, mutual funds and exchange-traded funds (ETFs) through mainly quantitative analysis. Many experts say the main advantage of Zacks is for trading advice.

Morningstar, however, is an industry leader in mutual fund and ETF research. Their experts also offer sound research into stocks, bonds and annuities. Many investing professionals swear by Morningstar’s mutual fund and ETF data, and even other leading investment advice sites, like The Motley Fool, rely on this data.

On the other hand, we’ve seen many less than stellar reviews from Zacks customers (both professional and private investors) who say their research and advice can be hit or miss — more so than other top independent investment research companies.

Morningstar logo

Reliability & Reputation Winner: Morningstar

Features

Both companies offer a wide variety of features, including investing news, analyst reports, real-time market data, top investment picks and a portfolio manager. It’s not easy to pick a winner in this category because each offers diverse tools with different approaches.

Zacks

You’ll want to sign up for Zacks Premium to get all of the robust features. Here are some of their most popular features.

  • Proprietary mutual fund ranking system that covers nearly 19,000 mutual funds
  • Zacks #1 Rank list — the top 5% of stocks with the most potential for outperforming the market (updated daily)
  • Premium Stock Screens that filter by value, growth, momentum, income and more
  • Focus List — a portfolio of 50 longer-term stocks to consider
  • Earnings ESP (Expected Surprise Prediction) Filter — find stocks that Zacks analysts think will beat the Wall Street expectations (good for short-term traders)
  • Extensive equity research reports

Zacks also has two higher-tier subscriptions. Their Investor Collection (meant for long-term investors) comes with everything in Premium plus real-time buy and sell signals and their Stocks Under $10 strategy. Zacks Ultimate includes access to everything plus exclusive stock picks and analysis.

Morningstar

Like with Zacks, you’ll need to sign up for Morningstar’s premium subscription to get all of their features. Here are some of their most popular.

  • Mutual and exchange-traded fund (ETF) reports that are widely used by investors to determine the investment quality of 2,000+ funds.
  • Rating method – Morningstar has a proprietary grading system (rated from 1 to 5 stars) for mutual funds and stocks that are based on their performance over time.
  • Stock and mutual fund screeners – tools that allow investors to select stocks and mutual funds based on different criteria, e.g., performance, star ratings, etc.
  • Portfolio X-Ray – looks at your investments to show you how your asset allocation is performing to make sure you’re properly diversified.
  • Valuation – Morningstar uses a propriety model to value companies using a discounted cash flow (DCF) model that’s not publicly disclosed. DCF models estimate the value of an investment today based on projections of how much money it will generate in the future.

Zacks & Morningstar logos

Features Winner: Tie (ZacksMorningstar)

Ease Of Use

Beginning investors will likely face a learning curve using both Zacks and Morningstar since both are geared toward investors with some experience under their belt. Both are data-heavy, but they present information in different ways.

Morningstar’s website is clean and polished, with information presented in easy-to-digest graphics. However, we found a few complaints that Morningstar’s interface is prone to glitches and/or missing data.

On the other hand, Zacks’ overall interface isn’t as intuitive as Morningstar’s. You have to dig a lot deeper to find the information you’re looking for, and it’s not always easy to find. This can get overwhelming, given the vast amount of data. But we didn’t find complaints about Zacks’ site performance. We’re calling this category a draw because each has its plusses and minuses.

Zacks & Morningstar logos

Ease Of Use Winner: Tie (ZacksMorningstar)

Customer Service

You can contact both companies’ member services departments during normal work hours, Monday through Friday. They offer phone and email support. Unfortunately, neither company has the kind of customer service reviews you like to see. We dock both for being difficult to reach by phone and slow to respond to email.

However, we give a slight edge to Zacks here because Morninstar’s service gets some pretty negative reviews when it comes to their tech support. Customers complain that their reps aren’t helpful in resolving website technical issues.

Another downside for Morningstar is the common complaint that it’s extremely challenging to reach anyone to cancel the free trial before you start getting billed (although we’ve seen a few complaints about this issue with Zacks as well).Zacks logo

Customer Service Winner: Zacks

Value

Both sites offer a good amount of free content. Zacks’ free content includes a daily newsletter, some free articles, a basic portfolio tracker, some rankings for stocks, mutual funds and ETFs and basic research content, including charts, quotes and news.

Morningstar’s free content includes article archives, basic research content, a basic portfolio manager, portfolio x-ray tool and screeners, as well as a great self-study course covering stocks, funds, ETFs, bonds and portfolio construction.

However, to get each company’s in-depth analyst reports and ratings for stocks, mutual funds and ETFs, you’ll need a premium subscription. We give the edge to Morningstar as a better overall value, largely for their more affordable pricing coupled with a better reputation for reliable data.

Both offer free trials, so you can get your feet wet to see which is a better fit. And Zacks even has a money-back guarantee (although 90 days is likely not long enough to gauge whether their advice is working for your investment performance or not).

Zacks Pricing

Zacks offers a 30-day free trial and a 90-day money-back guarantee.

Morningstar Pricing

Morningstar offers a 14-day free trial.

Value Winner: Morningstar

What’s The Verdict?

If you have to choose just one of these services, we give Morningstar the edge. Their reputation is just hard to beat. Although both aren’t cheap, Morningstar is a bit more affordable and a better overall value, in our opinion.

However, each site has different strengths, so your decision may come down to what your investing goals are. Zacks may be better for advanced investors who are more interested in trading, and Morningstar may be better for investors interested in mutual funds and ETFs.Morningstar logo

Overall Winner: Morningstar

While Zacks and Morningstar are certainly worth the investment, you may want to see some of your other options. Check out our reviews of the best investment advice websites, which compare the top players and also give you some recommendations on where to get the best investment news online. And if you’re primarily looking for stock advice, we encourage you to read our review of The Motley Fool’s Stock Advisor.

Are you willing to pay for investment advice?

About The Author:

While attending the University of North Carolina at Chapel Hill’s graduate school for journalism and public relations, Sally began a long career researching and writing about hard-to-understand topics, such as insurance and finance.

Her additional experience in marketing, fundraising, public relations and financial planning at various foundations and nonprofit organizations over the years has given her the practical tools to inform consumers about making the smartest business and personal financial decisions.

Speaking of smart living — growing up in the (at-the-time) per-capita murder capital of the U.S. (Richmond, VA) taught her a thing or two about the need for personal and home safety. Sally stays on top of all the latest gadgets and services to protect her and her teenage daughters from potential predators and thieves. And she brings this knowledge to every article she writes.

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