From The Dividend Monk:
This is the sixth and last in a series of articles highlighting dividend growth companies that have large and durable economic advantages, or “moats,” that protect their business operations and allow years or decades of strong profitability.
When looking for long-term investments, one typically wants to find a business that is performing well… not simply because management is on top of their game right now, but rather because the business itself has fundamental and difficult-to-replicate advantages over its competitors. The previous article described four businesses with natural monopolies.
This sixth and final description of a moat is the “Network Effect.” It comes last in the series, since it is the most elusive among dividend growth companies, and tends to be far more common in…