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Ares Management Corporation (ARES) vs Eli Lilly and Company (LLY): Which Is the Better Buy in 2026?

As of 2026-11-01, ARES is overvalued at $128, with a DCF intrinsic value of $72 and a margin of safety of -77%. LLY is fairly valued at $1418, with an intrinsic value of $1710 and a margin of safety of 17%. Of the two, LLY has the wider margin of safety.

ARES
Ares Management Corporation
$128.15
VS
LLY
Eli Lilly and Company
$1417.54

Rewards

ARES
  • ★Gross margin of 100.0% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Trailing P/E of 59.1x is 23% below the historical average of 77.2x — potentially undervalued relative to its own history.
  • ★PEG ratio of 0.95 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
LLY
  • ★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

ARES
  • ⚠Share count has increased by 25% over the past 4 years, diluting existing shareholders.
  • ⚠High leverage (1.51x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
  • ⚠Altman Z-Score of 1.36 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
LLY
  • ⚠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

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ARES
LLY
Valuation
N/A
Free Cash Flow
$9.34B
N/A
FCF Yield
0.74%
59.06
Trailing P/E
46.01
18.31
Forward P/E
28.66
Quality & Moat
0.48%
ROIC
40.83%
12.88%
ROE
86.02%
100.00%
Gross Margin
83.63%
0.95
PEG Ratio
1.36
Balance Sheet Safety
1.51
Net Debt / Equity
1.11
N/A
Interest Coverage
N/A
N/A
Net Debt / EBITDA
0.96
4.21%
Dividend Yield
0.49%
ARES: 4Ties: 1LLY: 4
ARESLLY

Historical Fundamentals

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ARES

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.

LLY

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

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ARES
N/A
Net losses over 3 years — test not applicable
Company had negative cumulative retained earnings
Σ Retained
$-2.63B
Δ Market Cap
+$23.73B
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
LLY
$27.49
created per $1 retained over 3 years
Exceptional Value Creator
Σ Retained
$22.34B
Δ Market Cap
+$614.01B
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

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

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ARES
77.0% Overvalued
Price is 77.0% above estimated fair value
Current Price: $128.15
Fair Value: $72.40
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
LLY
17.1% Margin of Safety
Price is 17.1% below estimated fair value
Current Price: $1417.54
Fair Value: $1709.89
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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ARES

Requires positive FCF to compute implied growth rate.

LLY

What growth rate is the market pricing in at $1418?

+23.5%
Market-Implied Owner Earnings Growth
Standard FCF implies +34.7%

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

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ARES
47/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with reinvestment efficiency as the key competitive advantage. Improving roic consistency would strengthen the moat.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 5 years of fundamental data.
LLY
73/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 5 years of fundamental data.

Forensic Accounting

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ARES
-2.63
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

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.
LLY
-1.83
Possible Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

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.

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

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ARES
Insiders 11.2%Institutions 94.2%
No. of Institutional Holders1,147
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
LLY
Insiders 0.2%Institutions 85.5%Retail & Other 14.4%
No. of Institutional Holders5,906
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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ARES
0
Buys (3M)
2
Buys (12M)
Total value (12M): $1.33M
OLIAN JUDY D.
Director
$59,726
@ $124.43 · 2026-02-20
BHUTANI ASHISH
Director
$1.27M
@ $126.61 · 2026-02-06
BHUTANI ASHISH
Director
$1.41M
@ $141.33 · 2025-03-11
Open market purchases · includes direct & indirect ownership · excludes option exercises
LLY
0
Buys (3M)
0
Buys (12M)
MONTARCE LUCAS E
Chief Financial Officer
$494,627
@ $691.79 · 2025-08-15
ALVAREZ RALPH
Director
$500,473
@ $660.25 · 2025-08-13
VAN NAARDEN JACOB S.
Officer
$647,360
@ $647.36 · 2025-08-13
SULZBERGER GABRIELLE
Director
$75,018
@ $641.18 · 2025-08-12
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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ARES
0
Sells (3M)
2
Sells (12M)
Total value (12M): $828,271
SAGATI AGHILI NASEEM
General Counsel
$529,032
@ $134.92 · 2026-02-04
SAGATI AGHILI NASEEM
General Counsel
$299,239
@ $161.84 · 2026-01-22
SAGATI AGHILI NASEEM
General Counsel
$3.28M
@ $155.97 · 2025-10-01
SAGATI AGHILI NASEEM
General Counsel
$3.75M
@ $178.40 · 2025-09-10
AROUGHETI MICHAEL J
Chief Executive Officer
$16.98M
@ $153.17 · 2025-03-24
DEVEER ROBERT KIPP III
President
$15.00M
@ $190.02 · 2025-02-06
BERRY RYAN
Officer
$2.62M
@ $180.16 · 2024-12-11
DEVEER ROBERT KIPP III
Officer and Director
$53.15M
@ $177.16 · 2024-12-10
BERRY RYAN
Officer
$980,502
@ $180.14 · 2024-12-09
BERRY RYAN
Officer
$292,425
@ $175.00 · 2024-11-11
BERRY RYAN
Officer
$3.21M
@ $175.18 · 2024-11-06
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
LLY
2
Sells (3M)
27
Sells (12M)
Total value (12M): $2.40B
JONSSON PATRIK
Officer
$7.64M
@ $1175.10 · 2026-08-17
ZAKROWSKI DONALD A
Officer
$2.37M
@ $1185.01 · 2026-08-10
YUFFA ILYA
Officer
$2.88M
@ $1150.77 · 2026-06-10
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$15.75M
@ $995.36 · 2026-05-06
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$322.38M
@ $1103.48 · 2026-01-07
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$1.51M
@ $1085.01 · 2026-01-05
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$3.90M
@ $1085.04 · 2025-12-29
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$2.85M
@ $1085.17 · 2025-12-24
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$260,409
@ $1085.04 · 2025-12-23
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$161.08M
@ $1095.35 · 2025-11-25
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$17.34M
@ $1109.30 · 2025-11-25
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$152.06M
@ $1068.52 · 2025-11-24
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$111.50M
@ $1058.66 · 2025-11-21
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$39.07M
@ $1051.66 · 2025-11-20
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$176.10M
@ $1051.17 · 2025-11-19
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$62.31M
@ $1034.78 · 2025-11-18
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$10.19M
@ $1030.68 · 2025-11-17
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$183.80M
@ $1030.87 · 2025-11-14
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$48.02M
@ $1030.26 · 2025-11-13
ZAKROWSKI DONALD A
Officer
$1.01M
@ $1010.50 · 2025-11-13
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$308.41M
@ $1011.18 · 2025-11-12
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$279.35M
@ $986.64 · 2025-11-11
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$16.41M
@ $972.52 · 2025-11-10
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$38.47M
@ $951.56 · 2025-11-05
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$167.09M
@ $933.26 · 2025-11-05
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$479,038
@ $910.72 · 2025-11-04
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$266.65M
@ $888.83 · 2025-11-03
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$260.17M
@ $863.35 · 2025-10-31
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$3.16M
@ $863.24 · 2025-10-10
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$9.04M
@ $852.49 · 2025-10-09
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$86.23M
@ $850.27 · 2025-10-08
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$22.72M
@ $848.01 · 2025-10-07
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$137.04M
@ $850.22 · 2025-10-06
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$161.22M
@ $837.93 · 2025-10-03
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$92.50M
@ $821.55 · 2025-10-02
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$107.36M
@ $794.15 · 2025-10-01
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$177.29M
@ $821.47 · 2025-10-01
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$86.79M
@ $763.39 · 2025-09-30
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$18.06M
@ $763.09 · 2025-09-19
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$81.53M
@ $764.65 · 2025-09-18
ZAKROWSKI DONALD A
Officer
$734,930
@ $734.93 · 2025-08-28
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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ARES
FearGreed
😨Fear(40/100)

"Market is pessimistic — investigate whether fears are temporary or structural"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
LLY
FearGreed
😏Greed(73/100)

"Market is optimistic — be cautious and ensure you have a margin of safety"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

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

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ARES
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Fear (40)
LLY
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Greed (73)
View ARES Full AnalysisView LLY Full Analysis

Frequently Asked Questions: ARES vs LLY

Is Ares Management Corporation or Eli Lilly and Company more undervalued in 2026?▼

Based on our discounted cash flow model, LLY trades at a 17.1% margin of safety (intrinsic value $1710 vs. price $1418), compared to ARES's -77.0% margin of safety (intrinsic $72 vs. $128).

Which stock has a wider economic moat, Ares Management Corporation or Eli Lilly and Company?▼

LLY scores 73/100 (Wide moat), while ARES scores 47/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is Ares Management Corporation in financial distress?▼

ARES's Altman Z-Score of 1.4 places it in the Distress zone, signaling elevated bankruptcy risk. LLY scores 8.7 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.

Which stock has higher return on invested capital, Ares Management Corporation or Eli Lilly and Company?▼

LLY earns 40.8% ROIC versus ARES's 0.5%. 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, Ares Management Corporation's or Eli Lilly and Company's?▼

LLY's dividend earns a safety score of 64/100 (Safe), compared to ARES's 54/100 (Borderline). LLY has raised its dividend for 3 consecutive years.

ARES vs LLY: Which Is the Better Buy in 2026? | SafetyMargin.io