When comparing investment research services, Zacks vs Morningstar are two top options, both suitable for self-directed research. But, they have different approaches that make them suitable for different types of investors. 

Zacks Investment Research and Morningstar, Inc. have similarities, as they offer investment-related data, analysis, and research. You can also compare Zacks vs Morningstar in different ways. Their ratings for stocks, ETFs, and mutual funds are based on different factors. Also, they are geared towards different types of investors, with Zacks for short-term traders and Morningstar for long-term investors.

In this guide, we take a closer look at Morningstar vs Zacks and help you choose what’s suitable for you.

Quick Glance of Zacks and Morningstar 

What is Zacks Investment Research 

Before we start the comparison, it’s important to answer the question, what is Zacks Investment Research? Zacks is a financial research and analysis company that helps investors learn about stocks, ETFs, and mutual funds. It comes with free and paid services, including financial data, research, and rankings, making it easy to decide.

The highlight of the service is the Zacks ranking system, which is based on the fact that stocks with rising earnings estimates can outperform those on the S&P 500. There is also a Zacks rank system for ETFs and mutual funds. 

Zacks also provides other stock analysis features like equity research reports and style scores. The subscription tiers include Zacks Premium (read our review here) and Zacks Ultimate, which users can pick depending on their needs. 

Zacks Investment Research is Chicago-based and founded in 1978 by Len Zacks. It provides free access to stock research, including Zacks stock picks, stock screening, and extensive company research. It’s suitable for individual and institutional investors.

What is Morningstar? 

Morningstar Inc. is, on the other hand, the comparison. It is an investment research firm that provides information and analysis on stocks, ETFs, and mutual funds. It was founded in 1984 by Joe Mansueto and is now a publicly owned company based in Chicago, Illinois. For a full take on just Morningstar you can read our dedicated Morningstar review.

Morningstar’s independent research is mostly popular because of its star rating. The rating system works by ranking a stock, ETF, or mutual fund from one to five stars and producing this list based on market risk and historical performance.

When you pay the Morningstar subscription fee, you can access professionally picked assets like stocks, confidential grade information, accurate research reports, and portfolio tools. It also offers stock and fund scanners and a free seven-day trial. Morningstar’s investment strategy focuses on long-term investments but requires subscribers to research the stocks themselves.

With a Morningstar membership, subscribers can receive stock picks from its analysts and database. There are also reports and detailed analyses of stocks, funds, and the general market. The research insights are easy to understand for beginner investors. 

Zacks vs Morningstar: Features for Investors 

When comparing Morningstar vs Zacks, it’s important to look at the features provided across their subscription levels. Both platforms provide tools for research and analysis, with similar features like their ranking systems and stock screener. They also have a good track record in terms of stock picking. 

Zacks 

Zacks Rank

The Zacks rank system is the highlight of the platform. This is a model that uses EPS surprises and earnings estimate revisions to place stocks into five categories. If a stock is given a Zack Rank #1 position, it is a strong buy and considered the best. But, a Zacks Rank #5 rating is a strong sell, which is the worst rating. Aside from stocks, it is also available for ETFs and mutual funds. The model helps investors find the stocks that institutional traders prefer.

Zacks #1 Rank List

The best stocks recommended by the Zacks ranking are placed on the #1 Rank list. The list compiles the top 5% of stocks on the platform, making it a good place to start when searching for stocks with the best potential. It is based on different metrics like value, momentum, VGM score, growth, and income. Subscribers to Zacks Premium gain access to this feature.  

Premium Screens

Zacks Investments provides premium screens for all subscribers. This is the screening and backtesting feature of the platform, providing 45 predefined criteria. By searching for stocks with these screens, Zacks focuses on helping you beat the market. It can be used to create custom screens if you don’t find the predefined screens helpful. The premium screens help investors select criteria based on their trading style, like momentum, growth, or value.

Equity Research Reports

Another feature of Zacks Investment Research Inc. is the research reports. These provide qualitative and quantitative analyses that investors can use to figure out which stocks to buy or sell. It provides quantitative models and advice from experienced analysts. The information in the reports is powered by earnings estimate revisions, which also influence the stock ranking. 

Focus List Portfolio

All subscribers on Zacks get access to a portfolio of 50 stocks that will outperform the market in the next 12 months. The list only contains stocks with a Zacks rank of 1 or 2, providing investors with the best for long-term trading. All stocks on the list have been handpicked by the director of research at Zacks based on the revisions of the earnings estimate. The top 50 options get selected from over 3,000 stocks. 

Zacks Research Wizard

Most subscribers check the Zacks Research Wizard reviews before registering on the platform. The wizard provides premium screens and other features like backtesting charting tools and data items. With the backtesting feature, you can compare the strategy against the S&P 500, Nasdaq, and Dow Jones. The charting tools help investors graph important data items like price, sales estimates, volume, and EPS growth. 

Zacks Trade

This is an online brokerage firm and trading platform suitable for those using Zacks Investment. It provides trading tools, and active traders can access major asset classes like stocks, options, bonds, crypto, ETFs, and mutual funds. By connecting Zacks Trade to the investing research platform, you can speed up your trading process.

Morningstar 

Morningstar Ratings

With a Morningstar membership, you get access to the star rating system, which makes it easy for investors to find socks and funds based on the thousands of options available. The stocks and funds are rated based on 1 to 5 stars, which is based on the risk-adjusted historical return of stocks. The rating depends mostly on mathematical measurement rather than human analysts. The funds are divided into categories based on their star rating, although the formula is complex.

Portfolio Manager

One of the highlights of a Morningstar subscription is the investment tracking and portfolio manager tool. It helps in diversifying your holdings, tracking financial goals, allocating assets, and sector weightings. All members will gain access to the Portfolio X-Ray. This includes different tools that can help in portfolio management. The X-Ray Report contains different graphics and statistics that show what is affecting your portfolio’s performance. The tool also helps in creating watchlists and tracking stocks. 

Analyst Insights and Picks

Morningstar Investor provides top-notch analyst insights and stock picks for free. There are over 150 accurate and independent analysts who provide insights and analysis on stocks, mutual funds, and ETFs. All the stocks receive ratings like Gold, Silver, Bronze, Neutral, and Negative. The higher a stock is rated, the more belief the analyst will have in the stock. The analyst picks are listed based on financial goals and investment type.

Stock Screener

Aside from receiving Morningstar recommendations from experts, you get a stock screener tool. This allows you to screen thousands of stocks, mutual funds, and ETFs, making it easy to find investments based on your specific criteria. After screening stocks, you can save the criteria and use them in the future to find stocks without much research. The stock screener features a database of over 7,000 stocks. The Morningstar mutual funds screener also helps investors find mutual funds to buy. 

Stock Lists

Morningstar uses its stock ratings to provide investment lists. The main list is their 5-star stocks list, which includes all the stocks that have been ranked the highest based on their rating system. Then, there are lists for undervalued and wide moat stocks, depending on your needs. The undervalued stocks that will provide active trading, receive the 5-star rating. Then, stocks on the 1-star list are overpriced with a low expected return. 

Connect to Brokerage

You can connect Morningstar to your brokerage account. After selecting the financial institution that you are connecting it to, you can assign it to portfolios. By combining the brokerage account with the research platform, you can view your holdings and performance in a streamlined manner. 

Available Resources and Customer Support 

When comparing Morningstar vs Zacks, it’s essential to compare the resources and customer support that they offer to subscribers. Both platforms offer different resources and analytical reports, a downloadable mobile app, and reliable customer service.

Morningstar has always been known as a top provider of information on mutual funds, but it has extended its services to provide ETFs and stocks, too. It features a document library, which includes annual reports, company information, and investment documents. There are also articles that are suitable for beginners and institutional investors.

Morningstar Direct is also a feature to look out for, as this helps users select and monitor their different investments. Then, there is an account resources portal where you can access a retirement manager and investor advisor. Morningstar Community comes with a discussion board for investors to learn from each other.

Looking at Zacks vs Morningstar, customer service is an important factor. Morningstar offers customer service through phone and email. There is also an FAQ sector to use in accessing information, making it suitable for beginners to get started with the platform.

Zacks Investment Research provides a resource center, but it is more limited than Morningstar. It focuses more on ranking stocks rather than customer education. The platform offers comprehensive research reports that are suitable for investors but cover over 1,000 stocks that you can read up on. Zacks independently analyzes all of these.

The Zacks stock picks come with different free content and tutorials, compiled with step-wise guides that beginners can use to learn how to operate Zacks. The reports also include comprehensive information on companies, stocks, and growth potential. The newsletter is available to provide tutorials and investing tips to novices.

In terms of customer service, Zacks provides reliable service through phone. Customer service by phone is available from 9 am to 6 pm EST, Mondays to Fridays. You can also view the phone numbers and email addresses of department heads on the website. The FAQ section and forum are suitable for subscribers to learn. 

Pricing and Subscription Plans 

It’s essential to compare Morningstar vs Zacks when thinking about the pricing and budget needs. This can help you determine whether the platform is suitable for you. 

Zacks Premium is the flagship pricing plan from Zacks Investment Research. On this plan, you receive professional-grade tools suitable for individual investors. These include daily updates from the Zacks Rank, Zacks Equity Research, a Focus list of 50 stocks, premium screens, and weekly market analysis. The plan costs $249 per year, with a 30-day free trial.

On the other hand, you can consider Morningstar Premium membership, which is suitable for investors who need detailed research. It comes with a gold medalist screener for funds and a wide moat screener for stocks. It features analyst ratings and reports, a premium e-newsletter, and a portfolio manager. The plan has the same price at $249 per year or $34.95 per month. 

Since the two services have the same plan, you need to consider whether it is suitable for you based on your investment goals. 

Zacks vs Morningstar: Suitable for Which Investor? 

Let’s check what type of investor Zacks and Morningstar target. Both platforms have different approaches, which you need to keep in mind.

For Morningstar, it is suitable for fundamental analysis of stocks, mutual funds, and ETFs. The plan is suitable for long-term investors and bases its stocks on an advanced scoring system. High-risk takers should consider this platform. It also has an approach to momentum stock investing. 

The tools provided by Morningstar are suitable for individual investors, institutional investors, and financial advisors. Also, the Morningstar fund ratings are ideal for investors who want to trade ETFs and mutual funds. It can help all levels of investors. 

On the other hand is Zacks, which is ideal for self-directed short-term traders, long-term investors, and any investor who is interested in ETFs and mutual funds. The Zacks Rank also helps investors choose stocks without much research based on investment newsletters and categories like value, income, growth, and options.

Zacks focuses on quantitative analysis, especially in the aspect of stocks. It is suitable for medium-term investors and average risk-takers. The monthly stock picks are simple, for beginners who don’t understand technical terms. Plus, it uses a growth stock investing approach. 

Real Online Reviews on Zacks and Morningstar 

During your Zacks vs Morningstar comparison, it’s a good idea to read online reviews from users who have registered on the platforms. 

Zacks has a decent rating online, although from a few investors. On Trustpilot, it has a 2.4 rating from 90 reviews. Then, on Sitejabber, it received a 4.4 rating from 136 reviews. Other reputable platforms have also reviewed Zacks. For instance, NerdWallet gives it a 3.5 rating.

On the other hand, is Morningstar, which also has very few reviews online. Consider checking Morningstar Reddit forums to know more about real user reviews. Morningstar has received a 1.7 rating from Trustpilot, with 89 reviews. As for the mobile app, it has a 4.1 rating from the App Store, from 6756 reviews. On Google Play, it has a 1.3 rating from 114 votes. 

Alternatives 

If you’re comparing Morningstar vs Zacks, there are different alternatives that you should keep in mind before settling on one investment research platform. 

Motley Fool 

Motley Fool is a financial services company that provides investment and financing advice. Its Stock Advisor service is the main alternative to Morningstar and Zacks, which provides monthly stock picks, starter stocks, Best Buy Now, and research resources. It also provides company analysis, free market news, and more. 

Read our full Motley Fool review for more information on this service. 

Seeking Alpha

Another alternative is Seeking Alpha, a crowd-sourced service that provides news and resources on the financial market. It is a massive investing community with services like stock analysis, portfolio trackers, analysis tools, newsletters, earnings call transcripts, and stock screeners. It also offers a free account with monthly articles and stock screeners. 

Read our in depth Seeking Alpha review for more information on this investing research platform and community. 

Zacks vs Morningstar: Conclusion

In conclusion, comparing Zacks vs Morningstar is important when choosing your stock research and investment platform. Both analysis platforms provide extensive tools and analysis for traders. It’s like having your personal financial advisor, providing unbiased research and extensive tools. Adept investors who want to trade stocks should consider Zacks, while new investors who want to buy and sell ETFs and mutual funds can sign up on Morningstar.