The new rating replaces Morningstar’s Stewardship Grade for stocks and grading scale of A, B, C, D, and F.
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Morningstar said its equity analysts assigned Stewardship Ratings for about 300 stocks in its coverage universe.
Morningstar added that it plans to assign the new rating to approximately 1,200 stocks over the next year.
Approximately 10% of the companies have received an Exemplary rating, 10% received a Poor rating, and the remainder of companies received a Standard rating, the research firm said.
"Our goal is to help investors identify companies that make capital allocation decisions that are in the best interests of shareholders," said Heather Brilliant, vice president of global equity and credit research for Morningstar.
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By GlobalData"We’ve spent the better part of a year creating a more holistic rating that we can apply to stocks around the globe, not just in the United States and Canada, and that places greater emphasis on management’s stewardship of shareholder capital. Under the new methodology, our analysts will focus less on ‘check the box’ governance practices and more on decisions that directly improve returns on invested capital and shareholder investment," Brilliant said.
