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D.R. Horton, Inc. (DHI) vs Eli Lilly and Company (LLY): Which Is the Better Buy in 2026?

As of 2026-11-01, DHI is undervalued at $146, with a DCF intrinsic value of $807 and a margin of safety of 82%. LLY is fairly valued at $1418, with an intrinsic value of $1710 and a margin of safety of 17%. Of the two, DHI has the wider margin of safety.

DHI
D.R. Horton, Inc.
$146.00
VS
LLY
Eli Lilly and Company
$1417.54

Rewards

DHI
  • ★D.R. Horton, Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
  • ★Free cash flow has grown at a 99.5% CAGR over the past 4 years, demonstrating strong earnings power growth.
  • ★Share count has been reduced by 14% over the past 4 years through buybacks, increasing each share's claim on earnings.
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

DHI
  • ⚠Gross margin of 20.6% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠Trailing P/E of 14.4x is 51% above the historical average of 9.6x — the stock trades at a premium to its own history.
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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DHI
LLY
Valuation
$7.82B
Free Cash Flow
$9.34B
19.72%
FCF Yield
0.74%
14.44
Trailing P/E
46.01
12.03
Forward P/E
28.66
Quality & Moat
10.15%
ROIC
40.83%
12.12%
ROE
86.02%
20.58%
Gross Margin
83.63%
1.23
PEG Ratio
1.36
Balance Sheet Safety
0.17
Net Debt / Equity
1.11
N/A
Interest Coverage
N/A
1.05
Net Debt / EBITDA
0.96
1.37%
Dividend Yield
0.49%
DHI: 6Ties: 1LLY: 5
DHILLY

Historical Fundamentals

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DHI

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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DHI
$0.99
created per $1 retained over 3 years
Mediocre Allocator
Σ Retained
$11.86B
Δ Market Cap
+$11.75B
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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DHI
75.9% Margin of Safety
Price is 75.9% below estimated fair value
Current Price: $146.00
Fair Value: $605.21
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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DHI

What growth rate is the market pricing in at $146?

+0.9%
Market-Implied Owner Earnings Growth
Standard FCF implies -10.4%

The market implies +0.9% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding -10.4%, reflecting heavy growth investment.

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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DHI
66/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with reinvestment efficiency as the key competitive advantage. Improving margin stability 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 4 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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DHI
-2.50
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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DHI
Insiders 10.7%Institutions 90.3%
No. of Institutional Holders1,648
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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DHI
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
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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DHI
0
Sells (3M)
1
Sells (12M)
Total value (12M): $43,563
ODOM ARON M
Officer
$43,563
@ $167.55 · 2026-02-13
AULD DAVID V
Officer and Director
$5.47M
@ $182.21 · 2025-09-05
BUCHANAN MICHAEL R
Director
$180,740
@ $180.74 · 2025-09-05
ODOM ARON M
Officer
$251,808
@ $183.00 · 2025-09-05
ODOM ARON M
Officer
$204,925
@ $166.20 · 2025-08-13
BUCHANAN MICHAEL R
Director
$274,552
@ $127.70 · 2025-06-24
ALLEN BARBARA K
Director
$921,515
@ $163.10 · 2024-11-21
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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DHI
FearGreed
😐Neutral(51/100)

"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.
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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DHI
⚪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 (51)
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 DHI Full AnalysisView LLY Full Analysis

Frequently Asked Questions: DHI vs LLY

Is D.R. Horton, Inc. or Eli Lilly and Company more undervalued in 2026?▼

Based on our discounted cash flow model, DHI trades at a 81.9% margin of safety (intrinsic value $807 vs. price $146), compared to LLY's 17.1% margin of safety (intrinsic $1710 vs. $1418).

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

LLY scores 73/100 (Wide moat), while DHI scores 66/100 (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, D.R. Horton, Inc. or Eli Lilly and Company?▼

D.R. Horton, Inc. (DHI) generates a 19.7% 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, D.R. Horton, Inc. or Eli Lilly and Company?▼

LLY earns 40.8% ROIC versus DHI'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, D.R. Horton, Inc.'s or Eli Lilly and Company's?▼

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

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