Johnson Controls International plc (JCI) vs Mastercard Incorporated (MA): Which Is the Better Buy in 2026?
As of 2026-06-19, JCI is undervalued at $145, with a DCF intrinsic value of $220 and a margin of safety of 34%. MA is fairly valued at $490, with an intrinsic value of $571 and a margin of safety of 14%. Of the two, JCI has the wider margin of safety.
Rewards
- ★Share count has been reduced by 11% over the past 4 years through buybacks, increasing each share's claim on earnings.
- ★Each dollar of retained earnings has created $5.60 of earning power — management is an exceptional capital allocator.
- ★Mastercard Incorporated has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 100.0% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Mastercard Incorporated scores 99/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠Trailing P/E of 44.3x is 69% above the historical average of 26.3x — the stock trades at a premium to its own history.
- ⚠Insiders have sold $13.4M worth of stock in the past 3 months — significant insider liquidation.
- ⚠Free cash flow has declined at a 13.7% CAGR over the past 4 years — a concerning trend.
- ⚠High leverage (1.60x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠12 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.
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 $145?
The market implies +11.3% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +14.9%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $490?
The market implies +13.0% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +12.0%, reflecting ongoing growth investment.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Wide moat with strength across all dimensions. ROIC Consistency 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 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: JCI vs MA
Is Johnson Controls International plc or Mastercard Incorporated more undervalued in 2026?▼
Based on our discounted cash flow model, JCI trades at a 34.1% margin of safety (intrinsic value $220 vs. price $145), compared to MA's 14.2% margin of safety (intrinsic $571 vs. $490).
Which stock has a wider economic moat, Johnson Controls International plc or Mastercard Incorporated?▼
MA scores 99/100 (Wide moat), while JCI scores 67/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Johnson Controls International plc in financial distress?▼
JCI's Altman Z-Score of 2.6 places it in the Grey zone, signaling elevated bankruptcy risk. MA scores 10.6 (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, Johnson Controls International plc or Mastercard Incorporated?▼
Mastercard Incorporated (MA) generates a 3.7% free cash flow yield, compared to Johnson Controls International plc's 3.2%. 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, Johnson Controls International plc or Mastercard Incorporated?▼
MA earns 63.5% ROIC versus JCI's 11.7%. 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, Johnson Controls International plc's or Mastercard Incorporated's?▼
MA's dividend earns a safety score of 94/100 (Very Safe), compared to JCI's 64/100 (Safe). MA has raised its dividend for 3 consecutive years.