General Mills, Inc. (GIS) vs Johnson & Johnson (JNJ): Which Is the Better Buy in 2026?
As of 2026-08-03, GIS is undervalued at $36, with a DCF intrinsic value of $40891580894 and a margin of safety of 100%. JNJ is fairly valued at $256, with an intrinsic value of $283 and a margin of safety of 9%. Of the two, GIS has the wider margin of safety.
Rewards
- ★General Mills, Inc. scores 80/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
- ★Net debt/EBITDA of -0.1x means the company holds more cash than debt — a net cash position.
- ★Johnson & Johnson has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 68.1% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Johnson & Johnson scores 90/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
Risks
- ⚠PEG ratio of 11.74 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠Altman Z-Score of 1.79 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
- ⚠Free cash flow has declined at a 8.0% CAGR over the past 4 years — a concerning trend.
- ⚠FCF yield of 2.7% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Trailing P/E of 29.8x is 49% above the historical average of 20.0x — the stock trades at a premium to its own history.
- ⚠PEG ratio of 4.23 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
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 $36?
Market below historical growth — potential opportunity.
What growth rate is the market pricing in at $256?
The market implies +9.1% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +16.5%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.
Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.
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 optimistic — be cautious and ensure you have a margin of safety"
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: GIS vs JNJ
Is General Mills, Inc. or Johnson & Johnson more undervalued in 2026?▼
Based on our discounted cash flow model, GIS trades at a 100.0% margin of safety (intrinsic value $40891580894 vs. price $36), compared to JNJ's 9.4% margin of safety (intrinsic $283 vs. $256).
Which stock has a wider economic moat, General Mills, Inc. or Johnson & Johnson?▼
JNJ scores 90/100 (Wide moat), while GIS scores 80/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is General Mills, Inc. in financial distress?▼
GIS's Altman Z-Score of 1.8 places it in the Distress zone, signaling elevated bankruptcy risk. JNJ scores 3.5 (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 dividend is safer, General Mills, Inc.'s or Johnson & Johnson's?▼
JNJ's dividend earns a safety score of 79/100 (Safe), compared to GIS's 35/100 (Unsafe). JNJ has raised its dividend for 3 consecutive years.