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Morgan Stanley (MS) vs Realty Income Corporation (O): Which Is the Better Buy in 2026?

As of 2026-09-17, MS is undervalued at $202, with a DCF intrinsic value of $303 and a margin of safety of 33%. O is overvalued at $57, with an intrinsic value of $0 and a margin of safety of -100%. Of the two, MS has the wider margin of safety.

MS
Morgan Stanley
$202.42
VS
O
Realty Income Corporation
$57.15

Rewards

MS
  • ★Gross margin of 87.6% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Morgan Stanley scores 80/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
  • ★Each dollar of retained earnings has created $3.56 of earning power — management is an exceptional capital allocator.
O
  • ★Gross margin of 92.7% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Free cash flow has grown at a 15.9% CAGR over the past 4 years, demonstrating strong earnings power growth.

Risks

MS
  • ⚠Altman Z-Score of 0.29 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
  • ⚠Insiders have sold $5.4M worth of stock in the past 3 months — significant insider liquidation.
O
  • ⚠Return on equity has remained below 5% over 4 years — shareholder capital is generating minimal returns.
  • ⚠Share count has increased by 41% over the past 4 years, diluting existing shareholders.
  • ⚠FCF yield of 7.4% suggests reasonable valuation assuming continued moderate growth.

Key Valuation Metrics

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MS
O
Valuation
N/A
Free Cash Flow
$3.99B
N/A
FCF Yield
7.39%
16.34
Trailing P/E
41.72
14.84
Forward P/E
36.80
Quality & Moat
3.53%
ROIC
3.07%
17.97%
ROE
3.23%
87.64%
Gross Margin
92.68%
1.82
PEG Ratio
2.99
Balance Sheet Safety
Net cash
Net Debt / Equity
0.73
N/A
Interest Coverage
N/A
N/A
Net Debt / EBITDA
5.74
2.27%
Dividend Yield
5.70%
MS: 6Ties: 1O: 2
MSO

Historical Fundamentals

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MS

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.

O

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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MS
$6.65
created per $1 retained over 3 years
Exceptional Value Creator
Σ Retained
$20.84B
Δ Market Cap
+$138.59B
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
O
N/A
Net losses over 3 years — test not applicable
Company had negative cumulative retained earnings
Σ Retained
$-4.94B
Δ Market Cap
+$10.77B
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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MS
33.2% Margin of Safety
Price is 33.2% below estimated fair value
Current Price: $202.42
Fair Value: $303.09
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
O
Insufficient Data
Enter initial FCF to calculate intrinsic value
Current Price: $57.15
Fair Value: $0.00
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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MS

Requires positive FCF to compute implied growth rate.

O

What growth rate is the market pricing in at $57?

+26.8%
Market-Implied Owner Earnings Growth
Standard FCF implies +8.5%

The market implies +26.8% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +8.5%, reflecting heavy growth investment.

Economic Moat Score

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MS
80/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat driven primarily by revenue predictability. Margin Stability 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 4 years of fundamental data.
O
55/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with margin stability as the key competitive advantage. Improving reinvestment efficiency would strengthen the moat.

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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MS
-2.09
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.
O
-2.52
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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MS
Insiders 24.4%Institutions 63.2%Retail & Other 12.4%
No. of Institutional Holders3,488
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.
O
Insiders 0.1%Institutions 81.7%Retail & Other 18.2%
No. of Institutional Holders1,924
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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MS
0
Buys (3M)
1
Buys (12M)
Total value (12M): $5,630
PETERSON DOUGLAS L
Director
$5,630
@ $156.39 · 2025-10-17
Open market purchases · includes direct & indirect ownership · excludes option exercises
O
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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MS
2
Sells (3M)
14
Sells (12M)
Total value (12M): $64.71M
SCHAPIRO MARY L
Director
$212,055
@ $212.06 · 2026-07-28
PIZZI MICHAEL A
Officer
$5.21M
@ $215.55 · 2026-07-17
GROSSMAN ERIC F
Officer
$2.12M
@ $190.75 · 2026-04-20
SIMKOWITZ DANIEL A
President
$2.78M
@ $189.24 · 2026-04-17
SAPERSTEIN ANDREW MICHAEL
President
$9.74M
@ $188.59 · 2026-04-16
CRAWLEY MANDELL L.
Officer
$3.04M
@ $188.22 · 2026-04-16
SIMKOWITZ DANIEL A
President
$6.02M
@ $182.61 · 2026-01-30
PIZZI MICHAEL A
Officer
$3.69M
@ $184.55 · 2026-01-20
SAPERSTEIN ANDREW MICHAEL
President
$5.57M
@ $183.62 · 2026-01-20
GROSSMAN ERIC F
Officer
$3.97M
@ $184.00 · 2026-01-20
CRAWLEY MANDELL L.
Officer
$1.44M
@ $183.45 · 2026-01-20
YESHAYA SHARON
Chief Financial Officer
$2.94M
@ $185.77 · 2026-01-20
SMITH CHARLES AUBREY III
Officer
$1.55M
@ $182.08 · 2026-01-20
PICK EDWARD N.
Chief Executive Officer
$16.43M
@ $164.34 · 2025-10-31
PIZZI MICHAEL A
Officer
$2.53M
@ $140.62 · 2025-07-17
SIMKOWITZ DANIEL A
President
$4.09M
@ $141.13 · 2025-07-17
GROSSMAN ERIC F
Officer
$1.69M
@ $141.12 · 2025-07-17
SMITH CHARLES AUBREY III
Officer
$2.81M
@ $140.30 · 2025-07-17
SIMKOWITZ DANIEL A
President
$3.70M
@ $127.37 · 2025-05-12
SAPERSTEIN ANDREW MICHAEL
President
$4.80M
@ $120.00 · 2025-05-02
HERZ ROBERT H
Director
$95,459
@ $119.32 · 2025-05-02
GROSSMAN ERIC F
Officer
$1.12M
@ $111.65 · 2025-04-15
CRAWLEY MANDELL L.
Officer
$1.15M
@ $138.06 · 2025-01-22
PIZZI MICHAEL A
Officer
$2.52M
@ $136.92 · 2025-01-21
SAPERSTEIN ANDREW MICHAEL
President
$4.20M
@ $136.43 · 2025-01-21
AKRAM RAJA
Chief Financial Officer
$2.38M
@ $136.01 · 2025-01-21
SIMKOWITZ DANIEL A
President
$5.00M
@ $136.61 · 2025-01-21
GROSSMAN ERIC F
Officer
$1.78M
@ $136.20 · 2025-01-21
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
O
0
Sells (3M)
2
Sells (12M)
Total value (12M): $1.13M
BUSHORE MICHELLE
General Counsel
$461,908
@ $62.42 · 2026-04-02
PREUSSE MARY HOGAN
Director
$664,730
@ $60.43 · 2025-09-30
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

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MS
FearGreed
😐Neutral(52/100)

"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.
O
FearGreed
😨Fear(35/100)

"Market is pessimistic — investigate whether fears are temporary or structural"

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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MS
⚪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 (52)
O
⚪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: Fear (35)
View MS Full AnalysisView O Full Analysis

Frequently Asked Questions: MS vs O

Is Morgan Stanley or Realty Income Corporation more undervalued in 2026?▼

Based on our discounted cash flow model, MS trades at a 33.2% margin of safety (intrinsic value $303 vs. price $202), compared to O's -100.0% margin of safety (intrinsic $0 vs. $57).

Which stock has a wider economic moat, Morgan Stanley or Realty Income Corporation?▼

MS scores 80/100 (Wide moat), while O scores 55/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is Morgan Stanley in financial distress?▼

MS's Altman Z-Score of 0.3 places it in the Distress zone, signaling elevated bankruptcy risk. O scores 1.0 (Distress 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, Morgan Stanley or Realty Income Corporation?▼

MS earns 3.5% ROIC versus O's 3.1%. 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, Morgan Stanley's or Realty Income Corporation's?▼

MS's dividend earns a safety score of 79/100 (Safe), compared to O's 39/100 (Unsafe). MS has raised its dividend for 3 consecutive years.