McKesson Corporation (MCK) vs Oracle Corporation (ORCL): Which Is the Better Buy in 2026?
As of 2026-08-03, MCK is undervalued at $856, with a DCF intrinsic value of $140987785214 and a margin of safety of 100%. ORCL is undervalued at $130, with an intrinsic value of $404 and a margin of safety of 68%. Of the two, MCK has the wider margin of safety.
Rewards
- ★McKesson Corporation has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★McKesson Corporation scores 89/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
- ★Each dollar of retained earnings has created $1.28 of earning power — management is creating shareholder value.
- ★Gross margin of 65.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
- ★Each dollar of retained earnings has created $3.80 of earning power — management is an exceptional capital allocator.
Risks
- ⚠Gross margin of 3.6% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠8 insider sales totaling $23.6M with no purchases in the past 3 months — insiders are reducing their exposure.
- ⚠Despite buyback spending, shares outstanding increased in 3 out of 4 years — stock-based compensation is offsetting repurchases.
- ⚠High leverage (3.15x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠Net debt/EBITDA of 4.4x indicates heavy leverage — it would take over 4 years of EBITDA to pay off net debt.
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 $856?
The market implies -30.0% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding -30.0%, reflecting heavy growth investment expected to generate future returns.
Requires positive FCF to compute implied growth rate.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.
Narrow moat with revenue predictability as the key competitive advantage. Improving reinvestment efficiency would strengthen the moat.
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 pessimistic — investigate whether fears are temporary or structural"
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: MCK vs ORCL
Is McKesson Corporation or Oracle Corporation more undervalued in 2026?▼
Based on our discounted cash flow model, MCK trades at a 100.0% margin of safety (intrinsic value $140987785214 vs. price $856), compared to ORCL's 67.8% margin of safety (intrinsic $404 vs. $130).
Which stock has a wider economic moat, McKesson Corporation or Oracle Corporation?▼
MCK scores 89/100 (Wide moat), while ORCL scores 67/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Oracle Corporation in financial distress?▼
ORCL's Altman Z-Score of 1.6 places it in the Distress zone, signaling elevated bankruptcy risk. MCK scores 5.4 (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, McKesson Corporation or Oracle Corporation?▼
MCK earns 80.1% ROIC versus ORCL's 9.2%. 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, McKesson Corporation's or Oracle Corporation's?▼
MCK's dividend earns a safety score of 94/100 (Very Safe), compared to ORCL's 79/100 (Safe). MCK has raised its dividend for 3 consecutive years.