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Cummins Inc. (CMI) vs Eli Lilly and Company (LLY): Which Is the Better Buy in 2026?

As of 2026-09-17, CMI is undervalued at $529, with a DCF intrinsic value of $698 and a margin of safety of 24%. LLY is undervalued at $1146, with an intrinsic value of $1598 and a margin of safety of 28%. Of the two, LLY has the wider margin of safety.

CMI
Cummins Inc.
$528.82
VS
LLY
Eli Lilly and Company
$1145.60

Rewards

CMI
  • ★Free cash flow has grown at a 31.6% CAGR over the past 4 years, demonstrating strong earnings power growth.
  • ★Each dollar of retained earnings has created $1.68 of earning power — management is creating shareholder value.
  • ★Altman Z-Score of 4.61 indicates very low bankruptcy risk — the company is firmly in the safe zone.
LLY
  • ★Eli Lilly and Company has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Gross margin of 83.4% 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

CMI
  • ⚠19 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.
LLY
  • ⚠FCF yield of 1.1% 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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CMI
LLY
Valuation
$2.23B
Free Cash Flow
$11.07B
3.06%
FCF Yield
1.08%
27.02
Trailing P/E
38.43
15.33
Forward P/E
24.21
Quality & Moat
14.70%
ROIC
38.43%
21.11%
ROE
102.29%
25.77%
Gross Margin
83.40%
1.09
PEG Ratio
1.12
Balance Sheet Safety
0.31
Net Debt / Equity
1.36
N/A
Interest Coverage
N/A
0.87
Net Debt / EBITDA
1.10
1.67%
Dividend Yield
0.61%
CMI: 6Ties: 2LLY: 4
CMILLY

Historical Fundamentals

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CMI

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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CMI
$7.92
created per $1 retained over 3 years
Exceptional Value Creator
Σ Retained
$4.58B
Δ Market Cap
+$36.28B
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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CMI
24.3% Margin of Safety
Price is 24.3% below estimated fair value
Current Price: $528.82
Fair Value: $698.13
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
LLY
28.3% Margin of Safety
Price is 28.3% below estimated fair value
Current Price: $1145.60
Fair Value: $1597.97
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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CMI

What growth rate is the market pricing in at $529?

+11.9%
Market-Implied Owner Earnings Growth
Standard FCF implies +15.2%

The market implies +11.9% Owner Earnings growth, below historical trends — potential opportunity.

Standard FCF implies a more demanding +15.2%, reflecting heavy growth investment expected to generate future returns.

LLY

What growth rate is the market pricing in at $1146?

+20.7%
Market-Implied Owner Earnings Growth
Standard FCF implies +29.4%

The market implies +20.7% Owner Earnings growth, below historical trends — potential opportunity.

Standard FCF implies a more demanding +29.4%, reflecting heavy growth investment expected to generate future returns.

Economic Moat Score

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CMI
55/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with reinvestment efficiency as the key competitive advantage. Improving revenue predictability 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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CMI
-2.51
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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CMI
Insiders 0.2%Institutions 87.8%Retail & Other 12.0%
No. of Institutional Holders2,696
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 85.3%Retail & Other 14.5%
No. of Institutional Holders5,890
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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CMI
0
Buys (3M)
0
Buys (12M)
STONE JOHN H
Director
$332,080
@ $332.08 · 2025-05-16
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
FYRWALD J. ERIK
Director
$1.01M
@ $642.33 · 2025-08-12
RICKS DAVID A
Chief Executive Officer
$1.05M
@ $644.77 · 2025-08-12
SKOVRONSKY DANIEL
Officer
$634,405
@ $634.40 · 2025-08-12
SULZBERGER GABRIELLE
Director
$75,018
@ $641.18 · 2025-08-12
JACKSON JAMERE
Director
$127,913
@ $639.57 · 2025-08-08
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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CMI
1
Sells (3M)
19
Sells (12M)
Total value (12M): $42.19M
NEWSOME EARL JR.
Chief Technology Officer
$399,410
@ $572.22 · 2026-08-24
JACKSON DONALD G
Officer
$518,975
@ $710.92 · 2026-05-14
BUSH JENNIFER MARY
Officer
$3.48M
@ $696.21 · 2026-05-12
STONER NATHAN R
Officer
$421,294
@ $694.06 · 2026-05-11
FETCH BONNIE J
Officer
$456,524
@ $700.19 · 2026-05-11
MERRITT BRETT MICHAEL
Officer
$483,153
@ $689.23 · 2026-05-11
LAMB-HALE NICOLE
Officer
$1.65M
@ $685.34 · 2026-05-08
BOAKYE MARVIN
Officer
$2.37M
@ $679.90 · 2026-05-08
DAVIS AMY ROCHELLE
Officer
$2.28M
@ $561.34 · 2026-03-03
JACKSON DONALD G
Officer
$2.32M
@ $465.64 · 2026-02-24
DAVIS AMY ROCHELLE
Officer
$1.09M
@ $586.64 · 2026-02-23
NEWSOME EARL JR.
Chief Technology Officer
$758,776
@ $583.67 · 2026-02-23
MILLER WILLIAM I
Director
$10.81M
@ $597.10 · 2026-02-11
BUSH JENNIFER MARY
Officer
$2.50M
@ $584.93 · 2026-02-10
MERRITT BRETT MICHAEL
Officer
$709,514
@ $489.32 · 2025-11-25
RUMSEY JENNIFER W.
Chief Executive Officer
$2.17M
@ $473.89 · 2025-11-11
SMITH MARK ANDREW
Chief Financial Officer
$6.17M
@ $470.66 · 2025-11-06
SMITH MARK ANDREW
Chief Financial Officer
$89,819
@ $449.10 · 2025-10-30
SMITH MARK ANDREW
Chief Financial Officer
$3.51M
@ $439.30 · 2025-10-06
SMITH MARK ANDREW
Chief Financial Officer
$3.77M
@ $415.73 · 2025-09-17
ENRIGHT ROBERT J
Officer
$748,210
@ $402.26 · 2025-08-22
DAVIS AMY ROCHELLE
Officer
$2.02M
@ $402.88 · 2025-08-14
SMITH MARK ANDREW
Chief Financial Officer
$5.00M
@ $400.20 · 2025-08-13
BUSH JENNIFER MARY
Officer
$201,826
@ $388.13 · 2025-08-08
PETERS LUTHER EARL
Officer
$1.89M
@ $389.19 · 2025-08-08
SMITH MARK ANDREW
Chief Financial Officer
$4.28M
@ $374.57 · 2025-02-10
BARNER SHARON R.
Officer
$798,403
@ $369.12 · 2024-11-21
BARNER SHARON R.
Officer
$784,071
@ $362.49 · 2024-11-13
DI LEO ALLEN BRUNO VITO
Director
$1.77M
@ $358.56 · 2024-11-12
JACKSON DONALD G
Officer
$1.78M
@ $356.21 · 2024-11-12
BARNER SHARON R.
Officer
$775,052
@ $358.32 · 2024-11-11
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
LLY
2
Sells (3M)
40
Sells (12M)
Total value (12M): $3.64B
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
$167.09M
@ $933.26 · 2025-11-05
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
$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
YUFFA ILYA
Officer
$783,762
@ $627.01 · 2025-08-11
LILLY ENDOWMENT, INC.
Beneficial Owner of more than 10% of a Class of Security
$225.42M
@ $805.07 · 2025-07-24
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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CMI
FearGreed
😨Fear(39/100)

"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
😐Neutral(56/100)

"Market is pricing this stock without strong emotion in either direction"

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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CMI
⚪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 (39)
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: Neutral (56)
View CMI Full AnalysisView LLY Full Analysis

Frequently Asked Questions: CMI vs LLY

Is Cummins Inc. or Eli Lilly and Company more undervalued in 2026?▼

Based on our discounted cash flow model, LLY trades at a 28.3% margin of safety (intrinsic value $1598 vs. price $1146), compared to CMI's 24.3% margin of safety (intrinsic $698 vs. $529).

Which stock has a wider economic moat, Cummins Inc. or Eli Lilly and Company?▼

LLY scores 73/100 (Wide moat), while CMI scores 55/100 (Narrow 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, Cummins Inc. or Eli Lilly and Company?▼

Cummins Inc. (CMI) generates a 3.1% free cash flow yield, compared to Eli Lilly and Company's 1.1%. 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, Cummins Inc. or Eli Lilly and Company?▼

LLY earns 38.4% ROIC versus CMI's 14.7%. 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, Cummins Inc.'s or Eli Lilly and Company's?▼

CMI's dividend earns a safety score of 94/100 (Very Safe), compared to LLY's 64/100 (Safe). CMI has raised its dividend for 3 consecutive years.