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Johnson & Johnson (JNJ) vs LyondellBasell Industries NV (LYB): Which Is the Better Buy in 2026?

As of 2026-08-03, JNJ is fairly valued at $256, with a DCF intrinsic value of $283 and a margin of safety of 9%. LYB is undervalued at $62, with an intrinsic value of $14933719042 and a margin of safety of 100%. Of the two, LYB has the wider margin of safety.

JNJ
Johnson & Johnson
$256.35
VS
LYB
LyondellBasell Industries NV
$62.08

Rewards

JNJ
  • ★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.
LYB

    Risks

    JNJ
    • ⚠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.
    LYB
    • ⚠ROIC has declined by 13.6 percentage points over the past 4 years, which may signal competitive erosion.
    • ⚠Gross margin of 12.9% is low, suggesting a competitive or commodity-like market with limited pricing power.
    • ⚠Altman Z-Score of 1.42 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.

    Key Valuation Metrics

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    JNJ
    LYB
    Valuation
    $16.89B
    Free Cash Flow
    $1.23B
    2.73%
    FCF Yield
    N/A
    29.77
    Trailing P/E
    N/A
    20.07
    Forward P/E
    9.65
    Quality & Moat
    16.85%
    ROIC
    17.58%
    25.74%
    ROE
    -2.27%
    68.14%
    Gross Margin
    12.89%
    4.23
    PEG Ratio
    1.53
    Balance Sheet Safety
    0.33
    Net Debt / Equity
    1.08
    N/A
    Interest Coverage
    N/A
    0.81
    Net Debt / EBITDA
    3.27
    2.09%
    Dividend Yield
    6.64%
    JNJ: 5Ties: 2LYB: 3
    JNJLYB

    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.

    LYB

    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
    LYB
    N/A
    Net losses over 3 years — test not applicable
    Company had negative cumulative retained earnings
    Σ Retained
    $-2.37B
    Δ Market Cap
    $-39.73
    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
    9.4% Margin of Safety
    Price is 9.4% below estimated fair value
    Current Price: $256.35
    Fair Value: $282.82
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued
    LYB
    100.0% Margin of Safety
    Price is 100.0% below estimated fair value
    Current Price: $62.08
    Fair Value: $29584444697.22
    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 $256?

    +9.1%
    Market-Implied Owner Earnings Growth
    Standard FCF implies +16.5%

    The market implies +9.1% Owner Earnings growth, above historical trends.

    Standard FCF implies a demanding +16.5%, reflecting heavy growth investment.

    LYB

    What growth rate is the market pricing in at $62?

    -2.6%
    Market-Implied FCF Growth Rate

    Market pricing in significantly higher growth than history — aggressive.

    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.
    LYB
    32/100
    No Moat
    70+ Wide · 40-69 Narrow · <40 None

    No durable moat detected, though reinvestment efficiency shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.

    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.
    LYB
    -2.83
    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.

    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 0.0%Institutions 76.8%Retail & Other 23.1%
    No. of Institutional Holders5,754
    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.
    LYB
    Insiders 20.1%Institutions 78.0%Retail & Other 1.9%
    No. of Institutional Holders1,238
    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
    LYB
    0
    Buys (3M)
    1
    Buys (12M)
    Total value (12M): $246,621
    FOLEY KIMBERLY A
    Officer
    $246,621
    @ $43.56 · 2025-11-12
    HANLEY MICHAEL SEAN
    Director
    $199,535
    @ $57.01 · 2025-05-05
    HANLEY MICHAEL SEAN
    Director
    $270,196
    @ $72.05 · 2025-03-12
    BUCHANAN ROBIN WILLIAM TURNBULL
    Director
    $380,300
    @ $76.06 · 2024-12-13
    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
    2
    Sells (3M)
    13
    Sells (12M)
    Total value (12M): $106.31M
    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
    SWANSON JAMES D
    Chief Technology Officer
    $15.11M
    @ $243.39 · 2026-02-17
    BROADHURST VANESSA
    Officer
    $1.51M
    @ $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
    DECKER ROBERT J
    Officer
    $930,113
    @ $165.06 · 2024-08-30
    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
    LYB
    1
    Sells (3M)
    2
    Sells (12M)
    Total value (12M): $1.81M
    KAPLAN JEFFREY A
    Officer
    $741,573
    @ $74.16 · 2026-05-13
    VANACKER PETER Z E
    Chief Executive Officer
    $1.07M
    @ $53.57 · 2025-08-15
    FRIEDRICHS DALE D
    Officer
    $480,997
    @ $96.78 · 2024-08-20
    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

    Learn more →
    JNJ
    FearGreed
    😏Greed(61/100)

    "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.
    LYB
    FearGreed
    😐Neutral(49/100)

    "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 (61)
    LYB
    ⚪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 (49)
    View JNJ Full AnalysisView LYB Full Analysis

    Frequently Asked Questions: JNJ vs LYB

    Is Johnson & Johnson or LyondellBasell Industries NV more undervalued in 2026?▼

    Based on our discounted cash flow model, LYB trades at a 100.0% margin of safety (intrinsic value $14933719042 vs. price $62), compared to JNJ's 9.4% margin of safety (intrinsic $283 vs. $256).

    Which stock has a wider economic moat, Johnson & Johnson or LyondellBasell Industries NV?▼

    JNJ scores 90/100 (Wide moat), while LYB scores 32/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

    Is LyondellBasell Industries NV in financial distress?▼

    LYB's Altman Z-Score of 1.4 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 stock has higher return on invested capital, Johnson & Johnson or LyondellBasell Industries NV?▼

    LYB earns 17.6% ROIC versus JNJ's 16.9%. 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 LyondellBasell Industries NV's?▼

    JNJ's dividend earns a safety score of 79/100 (Safe), compared to LYB's 41/100 (Borderline). JNJ has raised its dividend for 3 consecutive years.

    JNJ vs LYB: Which Is the Better Buy in 2026? | SafetyMargin.io