Why Eli Lilly Stock Jumped by 4% Today
The largest pharmaceutical company in the world by market cap, Eli Lilly (NYSE: LLY), is continuing to share some of its profits with shareholders. The company has kept its quarterly dividend payments flowing, and declared a new distribution on Monday. Investors like getting cash from their companies, and this upcoming payment is generous compared to what it was only a few months ago.
Fresh dividend declared
That morning, Eli Lilly announced that its next quarterly dividend would match its predecessor at $1.30 per share. This is to be paid on June 10 to stockholders of record as of May 16.
Late last year, the pharmaceutical giant enacted a dividend raise, hiking the payout to the present level from $1.13 per share for a 15% increase. The company's share price has accelerated faster than that, however, so the dividend yield on the enhanced amount is only 0.7%; this is not only below the average of 1.3% for S&P 500 index stocks, but it's eclipsed by rivals in the pharmaceutical sector.
Yet, in this case, any dividend is frosting on the Eli Lilly cake, and it's welcomed. The company has been attracting the right kind of attention lately due to Zepbound, which is basically its Mounjaro diabetes treatment repackaged and Food and Drug Administration (FDA)-approved for obesity.
This has vaulted Eli Lilly into a rapidly burgeoning, high-demand sector of the pharmaceutical market. Especially in the U.S., obesity is a problem, and many folks are looking for the relatively easy fix of a weight-loss drug.
A reliable and growing payout
Eli Lilly has never been, and likely won't ever be, considered a top dividend stock. Still, it is a steady and reliable payer which habitually lifts its payout once per year, so that adds to the attractiveness of the company. If Zepbound takes off as many expect it to, shareholders can look forward to higher dividend raises in the future.
Should you invest $1,000 in Eli Lilly right now?
Before you buy stock in Eli Lilly, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $544,015!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of May 6, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Eli Lilly Stock Jumped by 4% Today was originally published by The Motley Fool