Investors are keeping a close watch on Eli Lilly (NYSE: LLY), currently the largest pharmaceutical company globally with a market cap exceeding $800 billion. The company’s impressive growth trajectory has been significantly driven by its innovative diabetes and weight loss treatments, particularly its glucagon-like peptide-1 (GLP-1) agonists like Mounjaro and Zepbound.
Over the past year, Eli Lilly’s stock has seen an astonishing surge of 58%, outperforming both the S&P 500 and Nasdaq Composite indices. This meteoric rise in share price has led some market watchers to speculate about a potential stock split. However, there’s more on the horizon than just splitting shares, as the company has not undergone a stock split since 1997.
A more likely scenario is a dividend increase, which would underscore the company’s financial stability and commitment to returning value to shareholders. Over the years, Eli Lilly has built a solid reputation for steadily increasing its dividend payouts. The company began this trend in 2015, and its quarterly dividend has risen from an insignificant $0.01 per share back in 1972 to $1.30 currently. This equates to an annual dividend of $5.20 for each share held by investors.
While there was a stagnation phase for dividends between 2009 and 2014, the consistent upward trajectory since 2015 has been attributed to several factors, including the approval of key products like Trulicity. Recent advancements surrounding its cancer medication, Verzenio, along with breakthroughs in Alzheimer’s treatments, indicate that Eli Lilly is poised for further growth.
Traditionally, Eli Lilly has announced its annual dividend increase in December, with an ex-dividend date typically falling in mid-February. Investors should consider this pattern when planning their investments, particularly if they wish to benefit from any upcoming dividend hikes.
One of the company’s key strengths is its ability to tap into various high-demand medical areas, particularly with its burgeoning GLP-1 treatments, alongside the ongoing exploration of artificial intelligence in healthcare. For those searching for passive income opportunities, Eli Lilly presents a compelling investment case, combining growth potential through innovative products with the reassurance of reliable dividends.
Given the market dynamics and Eli Lilly’s robust position, now could be an opportune time to invest. History suggests that December may bring fresh prospects for dividend increases, making it prudent for investors to act before the ex-dividend date, which is likely in February.
As always, it’s crucial to do thorough research before making investment decisions. While Eli Lilly may not be featured among the hottest stock picks currently highlighted by financial analysts, the company’s strong foundation and growth prospects make it a noteworthy option.
Investors are advised to stay informed about Eli Lilly’s performance, particularly as developments around its GLP-1 treatments and other products continue to unfold. The company is not just a leader in pharmaceuticals; it also represents a promising opportunity in the healthcare sector with its diverse therapeutic portfolio and shareholder-friendly policies.