Lowe's Companies, Inc. (LOW) vs Philip Morris International Inc. (PM): Which Is the Better Buy in 2026?
As of 2026-06-19, LOW is overvalued at $222, with a DCF intrinsic value of $182 and a margin of safety of -22%. PM is overvalued at $178, with an intrinsic value of $139 and a margin of safety of -28%. Of the two, LOW has the wider margin of safety.
Rewards
- ★Lowe's Companies, Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Lowe's Companies, Inc. scores 80/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
- ★Philip Morris International Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 67.3% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Philip Morris International Inc. scores 100/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠Each dollar of retained earnings has produced only $0.05 of earning power — shareholders may have been better served by dividends.
- ⚠FCF yield of 6.1% suggests reasonable valuation assuming continued moderate growth.
- ⚠Beneish M-Score of 8.81 flags financial patterns consistent with potential earnings manipulation — warrants further investigation.
- ⚠PEG ratio of 2.57 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
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 $222?
The market implies +10.7% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +8.8%, reflecting heavy growth investment.
What growth rate is the market pricing in at $178?
The market implies +12.1% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +16.4%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Margin Stability is the standout factor.
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 pricing this stock without strong emotion in either direction"
"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: LOW vs PM
Is Lowe's Companies, Inc. or Philip Morris International Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, LOW trades at a -22.0% margin of safety (intrinsic value $182 vs. price $222), compared to PM's -28.1% margin of safety (intrinsic $139 vs. $178).
Which stock has a wider economic moat, Lowe's Companies, Inc. or Philip Morris International Inc.?▼
PM scores 100/100 (Wide moat), while LOW scores 80/100 (Wide 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, Lowe's Companies, Inc. or Philip Morris International Inc.?▼
Lowe's Companies, Inc. (LOW) generates a 6.1% free cash flow yield, compared to Philip Morris International Inc.'s 3.1%. 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, Lowe's Companies, Inc. or Philip Morris International Inc.?▼
PM earns 22.7% ROIC versus LOW's 18.2%. 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, Lowe's Companies, Inc.'s or Philip Morris International Inc.'s?▼
LOW's dividend earns a safety score of 94/100 (Very Safe), compared to PM's 34/100 (Unsafe). LOW has raised its dividend for 3 consecutive years.
Does Lowe's Companies, Inc. have accounting red flags?▼
LOW's Beneish M-Score of 8.8 flags it as a likely earnings manipulator (above the -1.78 threshold). By contrast, PM scores -2.4, within the normal range. The Beneish model detects aggressive accounting through eight financial ratios.