Morningstar Just Named 15 Stocks That Wiped Out Billions in Value

Morningstar published a list on August 11 identifying the 15 U.S. stocks that destroyed the most shareholder wealth from 2016 through 2025. The group collectively erased an estimated $217.2 billion.

Periodic reviews like this one matter to your financial fitness because they reveal the patterns behind long-term losers, and those patterns tend to repeat. The single most common trait among the 15 was the absence of an economic moat. The methodology, the biggest offenders, and the moat connection all carry practical lessons.

How Morningstar measured shareholder wealth destruction

Morningstar portfolio strategist Amy C. Arnott sorted through the firm's U.S. equity database to find the largest drops in market capitalization over the decade ending in 2025, then added back dividends paid and spinoff values to isolate true shareholder value destruction, as described in the Morningstar report. The approach captures the net loss investors absorbed after accounting for cash returned along the way.

The methodology matters because a stock could fall sharply and still return meaningful dividends. By adding those back, Arnott isolated the companies where even the income did not offset the damage to your capital.

Kraft Heinz destroyed $36.1 billion in shareholder wealth

Kraft Heinz (NASDAQ:KHC) topped the list with an estimated $36.1 billion in wealth destruction, driven in part by a goodwill impairment charge exceeding $15 billion tied to the Heinz acquisition, according to Morningstar's analysis. The stock has declined roughly 55% from its post-merger peak.

The Kraft-Heinz merger in 2015 was structured as a cost-cutting play rather than a growth strategy. When revenue failed to grow and consumer preferences shifted toward fresher food brands, the cost savings ran out, and the stock followed. Morningstar currently assigns Kraft Heinz a narrow economic moat and a 5-star rating, indicating the firm believes the stock is significantly undervalued at current prices.

11 of the 15 worst stocks had no economic moat

Morningstar found that 11 of the 15 stocks on the list had no economic moat rating, meaning the firm sees no durable competitive advantage protecting their profits, as detailed in the August 11 report. The remaining four had narrow moats. Key contrasts with the wealth creators include the following.

• 11 of 15 wealth destroyers had no economic moat.
• Four had narrow moats, including Biogen, Illumina, Kraft Heinz, and SLB.
• 12 of 15 wealth creators on Morningstar's companion list had wide moats.
• The $217.2 billion in total destruction is a fraction of the trillions created by the top 15 winners.

Failed acquisitions drove major shareholder losses

Kraft Heinz's $15 billion-plus goodwill write-down is the most prominent example, but overpaying for acquisitions appeared elsewhere on the list. Companies that grew through debt-funded deals often found themselves unable to generate the returns needed to justify the purchase price, and the stock eventually reflected the gap.

The lesson holds direct relevance for your portfolio risk management. Companies announcing large acquisitions funded by debt and justified by projected cost savings have historically carried elevated risk of ending up on lists like this one.

4 wealth-destroying stocks now have 5-star Morningstar ratings

Morningstar assigned 5-star ratings to Bath and Body Works, Kraft Heinz, VF Corp, and Vornado Realty Trust as of August 11, indicating each trades at a significant discount to the firm's fair value estimate, as noted in the report. Advance Auto Parts, Perrigo, and Under Armour received 4-star ratings for trading at modest discounts.

A stock that destroyed wealth over the past decade could still be undervalued going forward. Morningstar's rating system is forward-looking, which means Arnott's list of worst performers contains names the firm's own analysts consider potential buys at current prices.

The biggest stock winners created far more wealth than losers destroyed

Morningstar's companion analysis found that the top 15 wealth-creating stocks generated $27 trillion in shareholder wealth over the same decade, a figure that dwarfs the $217.2 billion the destroyers erased.

A stock cannot lose more than 100% of its value, but a winning stock could multiply many times over. This asymmetry means a diversified portfolio with a mix of winners and losers has historically come out ahead as long as the winners are held long enough to compound.

Economic moat ratings could help investors avoid wealth-destroying stocks

Morningstar's data demonstrates that companies without a competitive advantage were far more likely to end up on the wealth-destruction list, and companies with wide moats were far more likely to appear among the top creators. Screening for moats before buying a stock does not guarantee gains, but it would have helped avoid 11 of the 15 biggest losers.

Morningstar publishes moat ratings on thousands of U.S. stocks, and most major brokerage platforms display them. The screening takes seconds, and the pattern in the data is clear enough to justify the effort.

Bottom line

Eleven of the 15 biggest wealth-destroying stocks from 2016 through 2025 had no economic moat. Kraft Heinz led the group with $36.1 billion in losses driven by a failed acquisition strategy, and the full list collectively erased $217.2 billion. The pattern is consistent, and it points to a single variable that separated the biggest losers from the biggest winners.

Checking any stock's moat rating before buying takes less time than reading this article. Cross-referencing moat data on must-have investing apps with valuation and growth metrics gives you a simple framework for avoiding the next company that ends up on a list like this.

This article is for informational purposes only and should not be considered investment advice.

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