Since its foundation some two-dozen years ago, Morningstar (Nasdaq: MORN) has set the standard for providing investment advice to the common man. It began with groundbreaking research on mutual fund performance, more recently moved into stock advice, and may one day branch out into even more arcane fields of securities analysis, perhaps even competing with Moody's (NYSE: MCO) and McGraw-Hill (NYSE: MHP) in rating debt.

Some might say that Morningstar is straying from its roots. Me, I'd agree -- and I'd add that that's a good thing.

To see why I'd think that, consider Morningstar's Q1 report from late last week, a report that CEO Joe Mansueto reviewed before pronouncing himself: "pleased with our results during the quarter." As well he should be. Quarterly revenue shot up 31% in comparison to Q1 2007, with more than half that growth being organic rather than derived from acquisitions. Firmwide operating margins leapt 240 basis points (and kudos to Mansueto for modestly describing this as "about 2 percentage points," by the way), pushing profits up 42% to $0.47 per share. Here are a few of the highlights from Morningstar's three key segments:

Morningstar's individual business showed 6% growth in "premium" subscriptions to, helping to boost revenues here 14%. However, contraction in operating margins held back operating earnings growth to just 8%.

In contrast, margins expanded in Morningstar's advisor business, helping to transform 18% revenue growth into 28% earnings growth.

Revenue growth of 48% (most of it organic) plus 310 basis points worth of operating margin improvement translated into ... better sit down for this... 62% greater operating earnings than last year. Shazaam!

I suspect that this last bit of news requires a bit of context. Last quarter, Mansueto credited Morningstar's institutional investment consulting businesses (Morningstar Associates and Ibbotson Associates) with contributing 24% of revenue growth in 2007. Well, the trend that was true last year is also true today. The investment consulting businesses grew assets under advisement by 36%, making the "institutional" segment Morningstar's star again in Q1 2008.

Foolish takeaway
Providing unbiased information to the investing masses is the root from which Morningstar grew. But today, those masses investing in Morningstar need to take note: The real money in this business comes from catering not to the common man, but to megainstitutions like ING (NYSE: ING) Nationwide Financial (NYSE: NFS), MetLife (NYSE: MET), and Prudential (NYSE: PRU). Sad? Perhaps. But true -- and profitable in the extreme.

Put on your shades and gaze on Morningstar's recent performance in:

The McGraw-Hill Companies and Moody's are Motley Fool Inside Value recommendations. Morningstar and Moody's are Motley Fool Stock Advisor picks. The Fool owns shares of Morningstar. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Smith owns shares of Moody's. The Motley Fool has a disclosure policy.