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If you are interested in cashing in on Eli Lilly and Company’s (NYSE:LLY) upcoming dividend of $0.56 per share, you only have 3 days left to buy the shares before its ex-dividend date, 14 February 2018, in time for dividends payable on the 09 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Eli Lilly’s latest financial data to analyse its dividend characteristics. See our latest analysis for Eli Lilly
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
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Is it paying an annual yield above 75% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has the amount of dividend per share grown over the past?
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Is it able to pay the current rate of dividends from its earnings?
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Will it have the ability to keep paying its dividends going forward?
How well does Eli Lilly fit our criteria?
The current payout ratio for LLY is negative, which means that it is loss-making, and paying its dividend from its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of LLY it has increased its DPS from $1.88 to $2.25 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Relative to peers, Eli Lilly generates a yield of 2.95%, which is on the low-side for Pharmaceuticals stocks.
Next Steps:
Considering the dividend attributes we analyzed above, Eli Lilly is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three essential factors you should further research:
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1. Future Outlook: What are well-informed industry analysts predicting for LLY’s future growth? Take a look at our free research report of analyst consensus for LLY’s outlook.
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2. Valuation: What is LLY worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether LLY is currently mispriced by the market.
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3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.