Among the thousands of companies listed on the stock market, there are some that have the happy distinction of having a sustainable competitive advantage. Popularized by famous investor Warren Buffett, the term "moat" applies when a company creates a gap so wide that the competition cannot cross it. In other words, it represents the ability of a company to prosper over time in a highly competitive environment thanks to a differentiating element that gives it an advantage over its competitors. This is a very well-known notion in the world of long-term investment, but it is often difficult to grasp because it is subjective. To put it simply, imagine a castle (the company) with a moat around it (its competitive advantages). The wider and deeper the moat, the more protected the castle is from invaders (competitors). Porter identified (in 1995) five forces to describe competition in a market. The more protected the company is from these forces, the greater its sustainable competitive advantage. Porter's five forces relate to the intensity of competition in the market, the arrival of new entrants in the market, the existence of substitute products, the bargaining power of customers and the bargaining power of suppliers. The quality and durability of this competitive bulwark depends on the perception of the value proposition by customers, but also on the scarcity and difficulty for competitors to imitate this value proposition. The moat can take many forms such as: - Unparalleled expertise such as an exclusive service or superior product. - A barrier to entry in terms of research and development costs or infrastructure expenses. - An exit barrier resulting in high substitution costs to switch to an equivalent competing product. - A network effect linked to the number of users of a product or service that the company markets. - An economy of scale when the company relies on a large volume of sales. This results in operational efficiency because the company's costs decrease or stagnate when the production volume increases. - A dominant or monopolistic position in a market. - Possession of intangible assets such as a strong brand, licenses or patents. A company is not necessarily limited to one of these advantages. It can have several. In this case, the advantages are combined by multiplying each other rather than adding them up. In fact, each advantage will have a positive inertial effect on the other advantages by amplifying them, which will have an even more positive impact on the company's results and reputation. Companies with a sustainable competitive advantage are often much more profitable over time because they capitalize on their advantages at lower cost, making their business more efficient. The stocks of these companies tend to outperform their respective markets. This is why the MarketScreener team has created this thematic list of stocks with a moat.