Warren Buffett built one of history’s greatest investment records by doing one thing better than nearly anyone else: identifying businesses with durable competitive advantages, or what he calls “economic moats.” The term—borrowed from the water-filled trenches protecting medieval castles—describes a company’s ability to fend off competitors and sustain high returns on capital over time.

Morningstar, the financial research giant, formalized this concept into a rating system. Companies whose advantages are expected to last more than 20 years receive a “wide moat” designation. Those holding rivals off for roughly 10 years earn a “narrow moat.” Everyone else gets “no moat.”

“A truly great business must have an…