Eli Lilly's Dividend May Be Small, But its Growth Tells a Bigger Story

Eli Lilly and Company (NYSE:LLY) may offer a modest dividend yield, but its track record of consistent payouts remains strong.

The company’s underlying business is thriving, with analysts projecting its market value could hit $1 trillion in the coming years. Positive developments from its drug pipeline are boosting investor confidence, as promising clinical data could lead to new approvals and long-term growth. This optimism has already been reflected in the stock, which has soared over 412% in the last five years, far outpacing the broader market’s 93% return.

On the dividend front, Eli Lilly and Company (NYSE:LLY) has increased its payout for 11 consecutive years. With a payout ratio of just 44%, the company retains ample room for further dividend growth. In addition, it approved a new $15 billion share buyback program at the end of 2024, following the completion of a prior $5 billion program in the same year.

While the current yield sits at 0.73%, the strength of Eli Lilly and Company (NYSE:LLY)’s business and its growth potential make it a compelling option for income-focused investors. The company offers a quarterly dividend of $1.50 per share.

While we acknowledge the potential of LLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: Dividend Stock Portfolio For Retirement and 10 Unstoppable Dividend Stocks to Buy Now

Disclosure. None.