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Eli Lilly and Company (LLY) vs The Southern Company (SO): Which Is the Better Buy in 2026?

As of 2026-09-17, LLY is undervalued at $1145, with a DCF intrinsic value of $1598 and a margin of safety of 28%. SO is overvalued at $86, with an intrinsic value of $0 and a margin of safety of -100%. Of the two, LLY has the wider margin of safety.

LLY
Eli Lilly and Company
$1145.00
VS
SO
The Southern Company
$86.13

Rewards

LLY
  • ★Eli Lilly and Company has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Gross margin of 83.4% 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.
SO

    Risks

    LLY
    • ⚠FCF yield of 1.1% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
    • ⚠Insiders have sold $10.0M worth of stock in the past 3 months — significant insider liquidation.
    SO
    • ⚠PEG ratio of 2.06 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
    • ⚠High leverage (1.75x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
    • ⚠Net debt/EBITDA of 5.2x indicates heavy leverage — it would take over 4 years of EBITDA to pay off net debt.

    Key Valuation Metrics

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    LLY
    SO
    Valuation
    $11.07B
    Free Cash Flow
    $-3.91B
    1.08%
    FCF Yield
    -3.95%
    38.41
    Trailing P/E
    20.75
    24.20
    Forward P/E
    17.49
    Quality & Moat
    38.43%
    ROIC
    5.91%
    102.29%
    ROE
    11.48%
    83.40%
    Gross Margin
    48.29%
    1.12
    PEG Ratio
    2.06
    Balance Sheet Safety
    1.36
    Net Debt / Equity
    1.75
    N/A
    Interest Coverage
    N/A
    1.10
    Net Debt / EBITDA
    5.20
    0.61%
    Dividend Yield
    3.53%
    LLY: 8Ties: 1SO: 3
    LLYSO

    Historical Fundamentals

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    LLY

    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.

    SO
    No historical data available.

    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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    LLY
    $27.49
    created per $1 retained over 3 years
    Exceptional Value Creator
    Σ Retained
    $22.34B
    Δ Market Cap
    +$614.01B
    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
    SO
    Not enough historical data to compute the retained earnings test.

    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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    LLY
    28.3% Margin of Safety
    Price is 28.3% below estimated fair value
    Current Price: $1145.00
    Fair Value: $1597.97
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued
    SO
    Insufficient Data
    Enter initial FCF to calculate intrinsic value
    Current Price: $86.13
    Fair Value: $0.00
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued

    Reverse DCF — Market-Implied Growth

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    LLY

    What growth rate is the market pricing in at $1145?

    +20.7%
    Market-Implied Owner Earnings Growth
    Standard FCF implies +29.4%

    The market implies +20.7% Owner Earnings growth, below historical trends — potential opportunity.

    Standard FCF implies a more demanding +29.4%, reflecting heavy growth investment expected to generate future returns.

    SO

    Requires positive FCF to compute implied growth rate.

    Economic Moat Score

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    LLY
    73/100
    Wide Moat
    70+ Wide · 40-69 Narrow · <40 None

    Wide moat driven primarily by roic consistency. Reinvestment Efficiency is the area most vulnerable to competitive pressure.

    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.
    SO

    Insufficient data for Economic Moat Score calculation (requires 3+ years).

    Forensic Accounting

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    LLY
    -1.83
    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.
    SO

    Insufficient data for Beneish M-Score calculation (requires 2+ years).

    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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    LLY
    Insiders 0.2%Institutions 85.3%Retail & Other 14.5%
    No. of Institutional Holders5,890
    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.
    SO
    Insiders 0.1%Institutions 74.2%Retail & Other 25.7%
    No. of Institutional Holders2,863
    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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    LLY
    0
    Buys (3M)
    0
    Buys (12M)
    MONTARCE LUCAS E
    Chief Financial Officer
    $494,627
    @ $691.79 · 2025-08-15
    ALVAREZ RALPH
    Director
    $500,473
    @ $660.25 · 2025-08-13
    VAN NAARDEN JACOB S.
    Officer
    $647,360
    @ $647.36 · 2025-08-13
    FYRWALD J. ERIK
    Director
    $1.01M
    @ $642.33 · 2025-08-12
    RICKS DAVID A
    Chief Executive Officer
    $1.05M
    @ $644.77 · 2025-08-12
    SKOVRONSKY DANIEL
    Officer
    $634,405
    @ $634.40 · 2025-08-12
    SULZBERGER GABRIELLE
    Director
    $75,018
    @ $641.18 · 2025-08-12
    JACKSON JAMERE
    Director
    $127,913
    @ $639.57 · 2025-08-08
    Open market purchases · includes direct & indirect ownership · excludes option exercises
    SO
    0
    Buys (3M)
    0
    Buys (12M)
    No open market insider purchases found.
    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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    LLY
    2
    Sells (3M)
    40
    Sells (12M)
    Total value (12M): $3.64B
    JONSSON PATRIK
    Officer
    $7.64M
    @ $1175.10 · 2026-08-17
    ZAKROWSKI DONALD A
    Officer
    $2.37M
    @ $1185.01 · 2026-08-10
    YUFFA ILYA
    Officer
    $2.88M
    @ $1150.77 · 2026-06-10
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $15.75M
    @ $995.36 · 2026-05-06
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $322.38M
    @ $1103.48 · 2026-01-07
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $1.51M
    @ $1085.01 · 2026-01-05
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $3.90M
    @ $1085.04 · 2025-12-29
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $2.85M
    @ $1085.17 · 2025-12-24
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $260,409
    @ $1085.04 · 2025-12-23
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $161.08M
    @ $1095.35 · 2025-11-25
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $17.34M
    @ $1109.30 · 2025-11-25
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $152.06M
    @ $1068.52 · 2025-11-24
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $111.50M
    @ $1058.66 · 2025-11-21
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $39.07M
    @ $1051.66 · 2025-11-20
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $176.10M
    @ $1051.17 · 2025-11-19
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $62.31M
    @ $1034.78 · 2025-11-18
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $10.19M
    @ $1030.68 · 2025-11-17
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $183.80M
    @ $1030.87 · 2025-11-14
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $48.02M
    @ $1030.26 · 2025-11-13
    ZAKROWSKI DONALD A
    Officer
    $1.01M
    @ $1010.50 · 2025-11-13
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $308.41M
    @ $1011.18 · 2025-11-12
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $279.35M
    @ $986.64 · 2025-11-11
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $16.41M
    @ $972.52 · 2025-11-10
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $167.09M
    @ $933.26 · 2025-11-05
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $38.47M
    @ $951.56 · 2025-11-05
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $479,038
    @ $910.72 · 2025-11-04
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $266.65M
    @ $888.83 · 2025-11-03
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $260.17M
    @ $863.35 · 2025-10-31
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $3.16M
    @ $863.24 · 2025-10-10
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $9.04M
    @ $852.49 · 2025-10-09
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $86.23M
    @ $850.27 · 2025-10-08
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $22.72M
    @ $848.01 · 2025-10-07
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $137.04M
    @ $850.22 · 2025-10-06
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $161.22M
    @ $837.93 · 2025-10-03
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $92.50M
    @ $821.55 · 2025-10-02
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $107.36M
    @ $794.15 · 2025-10-01
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $177.29M
    @ $821.47 · 2025-10-01
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $86.79M
    @ $763.39 · 2025-09-30
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $18.06M
    @ $763.09 · 2025-09-19
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $81.53M
    @ $764.65 · 2025-09-18
    ZAKROWSKI DONALD A
    Officer
    $734,930
    @ $734.93 · 2025-08-28
    YUFFA ILYA
    Officer
    $783,762
    @ $627.01 · 2025-08-11
    LILLY ENDOWMENT, INC.
    Beneficial Owner of more than 10% of a Class of Security
    $225.42M
    @ $805.07 · 2025-07-24
    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
    SO
    6
    Sells (3M)
    13
    Sells (12M)
    Total value (12M): $6.21M
    SENA PETER P III
    Officer
    $377,925
    @ $88.59 · 2026-09-03
    KIM MATTHEW M.
    Officer
    $124,418
    @ $88.87 · 2026-09-03
    KIM MATTHEW M.
    Officer
    $8,845
    @ $88.45 · 2026-09-01
    SPAINHOUR STERLING A. JR.
    Officer
    $313,369
    @ $94.02 · 2026-08-06
    KIM MATTHEW M.
    Officer
    $9,428
    @ $94.28 · 2026-08-03
    KIM MATTHEW M.
    Officer
    $9,577
    @ $95.77 · 2026-07-01
    KIM MATTHEW M.
    Officer
    $9,116
    @ $91.16 · 2026-06-01
    KIM MATTHEW M.
    Officer
    $9,657
    @ $96.57 · 2026-05-01
    GREENE KIMBERLY S
    Officer
    $2.42M
    @ $96.67 · 2026-03-30
    CUMMISKEY CHRISTOPHER
    Officer
    $643,892
    @ $96.55 · 2026-03-19
    CONNALLY STANLEY W JR
    Chief Operating Officer
    $1.21M
    @ $97.13 · 2026-03-18
    KIM MATTHEW M.
    Officer
    $487,453
    @ $95.15 · 2026-02-24
    ANDERSON BRYAN D
    Officer
    $582,309
    @ $93.83 · 2025-09-30
    SPAINHOUR STERLING A. JR.
    Officer
    $226,148
    @ $95.02 · 2025-08-11
    GREENE KIMBERLY S
    Officer
    $1.25M
    @ $95.00 · 2025-07-21
    CUMMISKEY CHRISTOPHER
    Officer
    $1.10M
    @ $89.54 · 2025-05-23
    CONNALLY STANLEY W JR
    Chief Operating Officer
    $1.15M
    @ $92.24 · 2025-03-31
    GREENE KIMBERLY S
    Chief Executive Officer
    $3.00M
    @ $93.12 · 2025-03-10
    WOMACK CHRISTOPHER C.
    Chief Executive Officer
    $2.20M
    @ $90.13 · 2025-03-03
    DAVIS MARTIN BERNARD
    Chief Technology Officer
    $100,811
    @ $89.61 · 2025-03-03
    WOMACK CHRISTOPHER C.
    Chief Executive Officer
    $143,370
    @ $90.00 · 2025-02-25
    CUMMISKEY CHRISTOPHER
    Officer
    $81,184
    @ $86.00 · 2025-02-19
    PEOPLES JAMES JEFFREY
    Chief Executive Officer
    $1.25M
    @ $86.00 · 2025-02-11
    CUMMISKEY CHRISTOPHER
    Officer
    $69,739
    @ $83.32 · 2025-02-04
    WOMACK CHRISTOPHER C.
    Chief Executive Officer
    $1.21M
    @ $86.18 · 2024-12-05
    DAVIS MARTIN BERNARD
    Chief Technology Officer
    $100,503
    @ $85.90 · 2024-12-05
    SPAINHOUR STERLING A. JR.
    Officer
    $70,212
    @ $88.54 · 2024-11-04
    KERR JAMES Y. II
    Chief Executive Officer
    $2.69M
    @ $89.64 · 2024-10-04
    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 →
    LLY
    FearGreed
    😐Neutral(56/100)

    "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.
    SO
    FearGreed
    😐Neutral(43/100)

    "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

    Learn more →
    LLY
    ⚪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 (56)
    SO
    ⚪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 (43)
    View LLY Full AnalysisView SO Full Analysis

    Frequently Asked Questions: LLY vs SO

    Is Eli Lilly and Company or The Southern Company more undervalued in 2026?▼

    Based on our discounted cash flow model, LLY trades at a 28.3% margin of safety (intrinsic value $1598 vs. price $1145), compared to SO's -100.0% margin of safety (intrinsic $0 vs. $86).

    Which company has better free cash flow, Eli Lilly and Company or The Southern Company?▼

    Eli Lilly and Company (LLY) generates a 1.1% free cash flow yield, compared to The Southern Company's -3.9%. 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, Eli Lilly and Company or The Southern Company?▼

    LLY earns 38.4% ROIC versus SO's 5.9%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.