Morningstar Announces Dividend Hike and Overhauls Fund Rating Methodology

In a dual announcement that underscores both its financial health and strategic evolution, financial services firm Morningstar has declared a significant increase in its shareholder dividend alongside a major revision to its core fund evaluation system.

Following a board meeting this past Friday after market close, Morningstar approved a rise in its quarterly cash distribution to shareholders. The dividend will be lifted by approximately 10%, moving from 45.5 cents to 50 cents per share. On an annualized basis, this adjustment raises the payout from $1.82 to $2.00 per share. Shareholders of record as of January 2, 2026, will be eligible to receive the increased payment, which is scheduled for distribution on January 30, 2026.

Strategic Methodology Update

Coinciding with the dividend news, the company revealed substantial updates to its flagship "Morningstar Medalist Rating" framework, set to take effect globally in April 2026. The overhaul is designed to enhance clarity and simplicity for investors.

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A fundamental shift involves comparing funds directly against the average performance of their specific Morningstar category, rather than against a conventional benchmark index. This change is intended to facilitate more straightforward comparisons with peer products. Furthermore, a newly introduced "Medalist Rating Price Score" will explicitly factor a fund's cost structure into the overall rating, treating it as either a competitive disadvantage or advantage.

Regional Shift to Qualitative Analysis

Responding directly to client input, Morningstar is implementing a more pronounced change in its Australasia operations. Effective March 31, 2026, the firm will discontinue algorithm-generated ratings in that region. All evaluations will instead be conducted qualitatively by human analysts, a move that addresses customer requests for greater human judgment in the assessment process.

Market Context and Forward Outlook

These developments highlight management's financial confidence and the company's long-term strategic direction. Morningstar shares closed at €188.00 on Friday, having experienced a notable decline since the start of the year. Despite this recent performance, analysts from other institutions maintain a positive outlook, with an average price target of approximately $333. The next key milestones for investors are the dividend's ex-date in early January 2026 and the full implementation of the new rating methodology the following April.