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Johnson & Johnson (JNJ) vs Lennar Corporation (LEN): Which Is the Better Buy in 2026?

As of 2026-11-01, JNJ is overvalued at $273, with a DCF intrinsic value of $203 and a margin of safety of -35%. LEN is undervalued at $87, with an intrinsic value of $296 and a margin of safety of 71%. Of the two, LEN has the wider margin of safety.

JNJ
Johnson & Johnson
$273.20
VS
LEN
Lennar Corporation
$86.94

Rewards

JNJ
  • ★Johnson & Johnson has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Gross margin of 67.8% 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.
LEN
  • ★Share count has been reduced by 15% over the past 4 years through buybacks, increasing each share's claim on earnings.
  • ★3 insider purchases totaling $451.7M with no sells in the past 3 months — insiders are putting their own money in.
  • ★Altman Z-Score of 4.02 indicates very low bankruptcy risk — the company is firmly in the safe zone.

Risks

JNJ
  • ⚠FCF yield of 2.8% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
  • ⚠Trailing P/E of 41.5x is 108% above the historical average of 20.0x — the stock trades at a premium to its own history.
  • ⚠PEG ratio of 3.07 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
LEN
  • ⚠ROIC has declined by 9.9 percentage points over the past 4 years, which may signal competitive erosion.
  • ⚠Gross margin of 16.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠FCF yield of 5.9% suggests reasonable valuation assuming continued moderate growth.

Key Valuation Metrics

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JNJ
LEN
Valuation
$18.50B
Free Cash Flow
$1.23B
2.81%
FCF Yield
5.93%
41.46
Trailing P/E
16.47
23.52
Forward P/E
16.65
Quality & Moat
16.01%
ROIC
5.17%
20.02%
ROE
5.96%
67.77%
Gross Margin
16.01%
3.07
PEG Ratio
11.30
Balance Sheet Safety
0.34
Net Debt / Equity
0.23
N/A
Interest Coverage
N/A
0.79
Net Debt / EBITDA
2.48
1.96%
Dividend Yield
2.30%
JNJ: 6Ties: 1LEN: 5
JNJLEN

Historical Fundamentals

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JNJ

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.

LEN

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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JNJ
$0.91
created per $1 retained over 3 years
Mediocre Allocator
Σ Retained
$40.05B
Δ Market Cap
+$36.63B
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
LEN
$0.00
created per $1 retained over 3 years
Value Destroyer
Σ Retained
$8.45B
Δ Market Cap
+$821,755.949
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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JNJ
34.7% Overvalued
Price is 34.7% above estimated fair value
Current Price: $273.20
Fair Value: $202.84
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
LEN
40.6% Margin of Safety
Price is 40.6% below estimated fair value
Current Price: $86.94
Fair Value: $146.46
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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JNJ

What growth rate is the market pricing in at $273?

+9.9%
Market-Implied Owner Earnings Growth
Standard FCF implies +16.1%

The market implies +9.9% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +16.1%, reflecting heavy growth investment.

LEN

What growth rate is the market pricing in at $87?

+1.1%
Market-Implied Owner Earnings Growth
Standard FCF implies +8.3%

The market implies +1.1% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +8.3%, reflecting heavy growth investment.

Economic Moat Score

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JNJ
90/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.

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.
LEN
53/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with revenue predictability 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.

Forensic Accounting

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JNJ
-2.31
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.
LEN
-2.13
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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JNJ
Insiders 0.1%Institutions 76.8%Retail & Other 23.2%
No. of Institutional Holders5,842
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.
LEN
Insiders 15.7%Institutions 100.6%
No. of Institutional Holders1,250
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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JNJ
0
Buys (3M)
1
Buys (12M)
Total value (12M): $257,688
MORIKIS JOHN G
Director
$257,688
@ $206.15 · 2025-11-26
WEINBERGER MARK A
Director
$147,220
@ $147.22 · 2024-12-12
Open market purchases · includes direct & indirect ownership · excludes option exercises
LEN
3
Buys (3M)
3
Buys (12M)
Total value (12M): $451.71M
BERKSHIRE HATHAWAY INC
Beneficial Owner of more than 10% of a Class of Security
$191.46M
@ $79.65 · 2026-10-02
BERKSHIRE HATHAWAY INC
Beneficial Owner of more than 10% of a Class of Security
$53.55M
@ $81.60 · 2026-09-30
BERKSHIRE HATHAWAY INC
Beneficial Owner of more than 10% of a Class of Security
$206.70M
@ $77.46 · 2026-09-21
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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JNJ
5
Sells (3M)
14
Sells (12M)
Total value (12M): $128.54M
SCHMID TIMOTHY
Officer
$9.23M
@ $274.74 · 2026-09-02
TAUBERT JENNIFER L
Officer
$3.95M
@ $263.36 · 2026-08-17
DUATO JOAQUIN BOIX
Chief Executive Officer
$32.20M
@ $261.17 · 2026-08-13
FORMINARD ELIZABETH
Officer
$4.09M
@ $257.00 · 2026-08-06
DUATO JOAQUIN BOIX
Chief Executive Officer
$12.52M
@ $258.15 · 2026-08-05
BROADHURST VANESSA
Officer
$5.79M
@ $251.27 · 2026-07-20
WENGEL KATHRYN E
Chief Technology Officer
$2.41M
@ $241.15 · 2026-06-11
DECKER ROBERT J
Officer
$1.01M
@ $247.87 · 2026-02-27
SCHMID TIMOTHY
Officer
$324,763
@ $245.66 · 2026-02-20
SCHMID TIMOTHY
Officer
$5.53M
@ $244.33 · 2026-02-18
BROADHURST VANESSA
Officer
$1.51M
@ $243.39 · 2026-02-17
SWANSON JAMES D
Chief Technology Officer
$15.11M
@ $243.39 · 2026-02-17
WOLK JOSEPH J
Chief Financial Officer
$21.77M
@ $242.80 · 2026-02-17
REED JOHN C
Officer
$13.11M
@ $243.00 · 2026-02-17
REED JOHN C
Officer
$4.19M
@ $192.71 · 2025-10-17
TAUBERT JENNIFER L
Officer
$10.04M
@ $177.81 · 2025-09-04
DUATO JOAQUIN BOIX
Chief Executive Officer
$22.55M
@ $179.21 · 2025-08-22
WOLK JOSEPH J
Chief Financial Officer
$2.98M
@ $176.91 · 2025-08-15
REED JOHN C
Officer
$3.13M
@ $163.55 · 2025-07-17
DECKER ROBERT J
Officer
$1.16M
@ $165.88 · 2025-02-25
SCHMID TIMOTHY
Officer
$62,928
@ $156.15 · 2025-02-18
WOLK JOSEPH J
Chief Financial Officer
$2.00M
@ $153.89 · 2025-02-07
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
LEN
0
Sells (3M)
0
Sells (12M)
No open market insider sales found.
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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JNJ
FearGreed
😏Greed(67/100)

"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.
LEN
FearGreed
😐Neutral(47/100)

"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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JNJ
⚪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 (67)
LEN
⚪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 (47)
View JNJ Full AnalysisView LEN Full Analysis

Frequently Asked Questions: JNJ vs LEN

Is Johnson & Johnson or Lennar Corporation more undervalued in 2026?▼

Based on our discounted cash flow model, LEN trades at a 70.7% margin of safety (intrinsic value $296 vs. price $87), compared to JNJ's -34.7% margin of safety (intrinsic $203 vs. $273).

Which stock has a wider economic moat, Johnson & Johnson or Lennar Corporation?▼

JNJ scores 90/100 (Wide moat), while LEN scores 53/100 (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, Johnson & Johnson or Lennar Corporation?▼

Lennar Corporation (LEN) generates a 5.9% free cash flow yield, compared to Johnson & Johnson's 2.8%. 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 & Johnson or Lennar Corporation?▼

JNJ earns 16.0% ROIC versus LEN's 5.2%. 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 & Johnson's or Lennar Corporation's?▼

JNJ's dividend earns a safety score of 79/100 (Safe), compared to LEN's 64/100 (Safe). JNJ has raised its dividend for 3 consecutive years.