Lennar Corporation (LEN) vs Eli Lilly and Company (LLY): Which Is the Better Buy in 2026?
As of 2026-06-21, LEN is undervalued at $90, with a DCF intrinsic value of $621 and a margin of safety of 86%. LLY is fairly valued at $1099, with an intrinsic value of $1136 and a margin of safety of 3%. Of the two, LEN has the wider margin of safety.
Rewards
- ★Share count has been reduced by 15% over the past 4 years through buybacks, increasing each share's claim on earnings.
- ★Altman Z-Score of 4.02 indicates very low bankruptcy risk — the company is firmly in the safe zone.
- ★Eli Lilly and Company has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 82.8% 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
- ⚠ROIC has declined by 9.9 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠Gross margin of 16.4% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠Trailing P/E of 14.1x is 47% above the historical average of 9.5x — the stock trades at a premium to its own history.
- ⚠FCF yield of 0.9% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Insiders have sold $18.6M worth of stock in the past 3 months — significant insider liquidation.
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 →Requires positive FCF to compute implied growth rate.
What growth rate is the market pricing in at $1099?
The market implies +20.0% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +31.4%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving margin stability would strengthen the moat.
Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.
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: LEN vs LLY
Is Lennar Corporation or Eli Lilly and Company more undervalued in 2026?▼
Based on our discounted cash flow model, LEN trades at a 85.6% margin of safety (intrinsic value $621 vs. price $90), compared to LLY's 3.3% margin of safety (intrinsic $1136 vs. $1099).
Which stock has a wider economic moat, Lennar Corporation or Eli Lilly and Company?▼
LLY scores 73/100 (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 stock has higher return on invested capital, Lennar Corporation or Eli Lilly and Company?▼
LLY earns 37.8% ROIC versus LEN's 4.9%. 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, Lennar Corporation's or Eli Lilly and Company's?▼
LLY's dividend earns a safety score of 64/100 (Safe), compared to LEN's 64/100 (Safe). LLY has raised its dividend for 3 consecutive years.