Investors worldwide tend to favor domestic stocks due to familiarity, but adding international exposure is key for portfolio diversification. Morningstar recommends a strategic approach to stock investing, focusing on company research and moat ratings. They compiled a list of 35 top international companies for US investors, with industrials being the most represented sector.

Two companies that stand out on the list are Roche Holding and Yum China Holdings, both undervalued according to Morningstar’s fair value estimates. Roche’s strong competitive advantages in biologics and diagnostics position it well for future growth. Yum China’s scale advantages and market positioning make it a strong contender in the Chinese restaurant market.

Investors should exercise caution with the list and look for attractive entry points, as some companies may be overvalued. Morningstar’s in-depth analysis of Roche and Yum China highlights their competitive strengths and growth potential. The companies’ strategic positioning and long-term growth prospects make them compelling choices for investors to consider.

Read more at Morningstar: Best International Companies to Own: 2025 Edition