Berkshire Hathaway Inc. (BRK-B) vs Lamb Weston Holdings, Inc. (LW): Which Is the Better Buy in 2026?
As of 2026-08-03, BRK-B is fairly valued at $512, with a DCF intrinsic value of $637 and a margin of safety of 20%. LW is overvalued at $53, with an intrinsic value of $27 and a margin of safety of -95%. Of the two, BRK-B has the wider margin of safety.
Rewards
- ★Each dollar of retained earnings has created $3.95 of earning power — management is an exceptional capital allocator.
- ★Net debt/EBITDA of -2.3x means the company holds more cash than debt — a net cash position.
- ★Free cash flow has grown at a 71.2% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★7 insider purchases over the past 12 months with a buy/sell ratio above 3:1 — a sustained pattern of insider confidence.
- ★PEG ratio of 0.86 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
Risks
- ⚠FCF yield of 5.5% suggests reasonable valuation assuming continued moderate growth.
- ⚠Trailing P/E of 15.2x is 30% above the historical average of 11.7x — the stock trades at a premium to its own history.
- ⚠PEG ratio of 10.06 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠Gross margin of 20.7% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠FCF yield of 6.3% suggests reasonable valuation assuming continued moderate growth.
- ⚠Trailing P/E of 25.3x is 43% above the historical average of 17.7x — the stock trades at a premium to its own history.
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 $512?
The market implies +1.3% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +2.5%, reflecting heavy growth investment.
What growth rate is the market pricing in at $53?
The market implies +16.6% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +10.6%, 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 margin stability 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 optimistic — be cautious and ensure you have a margin of safety"
"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: BRK-B vs LW
Is Berkshire Hathaway Inc. or Lamb Weston Holdings, Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, BRK-B trades at a 19.6% margin of safety (intrinsic value $637 vs. price $512), compared to LW's -95.2% margin of safety (intrinsic $27 vs. $53).
Which stock has a wider economic moat, Berkshire Hathaway Inc. or Lamb Weston Holdings, Inc.?▼
LW scores 46/100 (Narrow moat), while BRK-B scores 40/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Berkshire Hathaway Inc. in financial distress?▼
BRK-B's Altman Z-Score of 2.5 places it in the Grey zone, signaling elevated bankruptcy risk. LW scores 2.6 (Grey 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, Berkshire Hathaway Inc. or Lamb Weston Holdings, Inc.?▼
Lamb Weston Holdings, Inc. (LW) generates a 6.3% free cash flow yield, compared to Berkshire Hathaway Inc.'s 5.5%. 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, Berkshire Hathaway Inc. or Lamb Weston Holdings, Inc.?▼
LW earns 8.7% ROIC versus BRK-B's 5.0%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.