Broadcom Inc. (AVGO) vs Henry Schein, Inc. (HSIC): Which Is the Better Buy in 2026?
As of 2026-09-17, AVGO is overvalued at $349, with a DCF intrinsic value of $259 and a margin of safety of -35%. HSIC is fairly valued at $84, with an intrinsic value of $85 and a margin of safety of 1%. Of the two, HSIC has the wider margin of safety.
Rewards
- ★Gross margin of 75.5% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Free cash flow has grown at a 18.2% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Each dollar of retained earnings has created $11.66 of earning power — management is an exceptional capital allocator.
- ★Share count has been reduced by 12% over the past 4 years through buybacks, increasing each share's claim on earnings.
Risks
- ⚠ROIC has declined by 6.5 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠Share count has increased by 13% over the past 4 years, diluting existing shareholders.
- ⚠FCF yield of 1.8% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
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 $349?
The market implies +21.4% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +21.7%, reflecting ongoing growth investment.
What growth rate is the market pricing in at $84?
The market implies +11.7% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +12.9%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with reinvestment efficiency as the key competitive advantage. Improving revenue predictability would strengthen the moat.
Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
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 pessimistic — investigate whether fears are temporary or structural"
"Market is pricing this stock without strong emotion in either direction"
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: AVGO vs HSIC
Is Broadcom Inc. or Henry Schein, Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, HSIC trades at a 0.7% margin of safety (intrinsic value $85 vs. price $84), compared to AVGO's -34.7% margin of safety (intrinsic $259 vs. $349).
Which stock has a wider economic moat, Broadcom Inc. or Henry Schein, Inc.?▼
AVGO scores 61/100 (Narrow moat), while HSIC scores 57/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Henry Schein, Inc. in financial distress?▼
HSIC's Altman Z-Score of 2.8 places it in the Grey zone, signaling elevated bankruptcy risk. AVGO scores 12.0 (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 company has better free cash flow, Broadcom Inc. or Henry Schein, Inc.?▼
Henry Schein, Inc. (HSIC) generates a 4.7% free cash flow yield, compared to Broadcom Inc.'s 1.8%. 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, Broadcom Inc. or Henry Schein, Inc.?▼
AVGO earns 24.0% ROIC versus HSIC's 7.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.