Analog Devices, Inc. (ADI) vs Eli Lilly and Company (LLY): Which Is the Better Buy in 2026?
As of 2026-11-01, ADI is undervalued at $417, with a DCF intrinsic value of $557 and a margin of safety of 25%. LLY is fairly valued at $1418, with an intrinsic value of $1710 and a margin of safety of 17%. Of the two, ADI has the wider margin of safety.
Rewards
- ★Gross margin of 65.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★PEG ratio of 0.62 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
- ★Altman Z-Score of 6.46 indicates very low bankruptcy risk — the company is firmly in the safe zone.
- ★Eli Lilly and Company has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 83.6% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Eli Lilly and Company scores 73/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠FCF yield of 2.1% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠13 insider sales totaling $15.8M with no purchases in the past 3 months — insiders are reducing their exposure.
- ⚠FCF yield of 0.7% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Insiders have sold $10.0M worth of stock in the past 3 months — significant insider liquidation.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $417?
The market implies +21.8% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +20.3%, reflecting heavy growth investment.
What growth rate is the market pricing in at $1418?
The market implies +23.5% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +34.7%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →No durable moat detected, though reinvestment efficiency shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.
Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is optimistic — be cautious and ensure you have a margin of safety"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: ADI vs LLY
Is Analog Devices, Inc. or Eli Lilly and Company more undervalued in 2026?▼
Based on our discounted cash flow model, ADI trades at a 25.1% margin of safety (intrinsic value $557 vs. price $417), compared to LLY's 17.1% margin of safety (intrinsic $1710 vs. $1418).
Which stock has a wider economic moat, Analog Devices, Inc. or Eli Lilly and Company?▼
LLY scores 73/100 (Wide moat), while ADI scores 36/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which company has better free cash flow, Analog Devices, Inc. or Eli Lilly and Company?▼
Analog Devices, Inc. (ADI) generates a 2.1% free cash flow yield, compared to Eli Lilly and Company's 0.7%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Analog Devices, Inc. or Eli Lilly and Company?▼
LLY earns 40.8% ROIC versus ADI's 10.1%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Analog Devices, Inc.'s or Eli Lilly and Company's?▼
LLY's dividend earns a safety score of 64/100 (Safe), compared to ADI's 64/100 (Safe). LLY has raised its dividend for 3 consecutive years.