Eli Lilly and Company: A High-Growth Dividend Stock to Watch

Eli Lilly and Company (LLY) has emerged as a standout performer in the pharmaceutical industry, with its recent financial results showcasing a remarkable 45% increase in revenue in Q4 2024. This surge, driven by the volume growth of Mounjaro and Zepbound, positions Eli Lilly as a high-growth dividend-paying stock that investors should closely monitor. The company's strong financial performance, coupled with its robust dividend history and growth prospects, makes it a compelling investment opportunity.

The 45% revenue increase in Q4 2024 is a testament to Eli Lilly's market leadership and the effectiveness of its product portfolio. This growth is particularly impressive when compared to the industry average, which typically sees more modest revenue increases. For instance, the non-incretin revenue grew by 20% compared to Q4 2023, indicating a broad-based strength across Eli Lilly's product lines. The company's earnings per share (EPS) also saw a substantial increase, rising by 102% to $4.88 on a reported basis and 114% to $5.32 on a non-GAAP basis. This significant EPS growth reflects Eli Lilly's ability to convert revenue growth into profitability, a key indicator of financial health and growth potential.

Eli Lilly's dividend history and growth further support its position as a high-growth dividend-paying stock. The company has increased its dividends for 10 consecutive years, with an annualized dividend growth rate of 15.23% over the past 12 months. This consistent dividend growth, coupled with a low payout ratio of 68.77%, indicates that Eli Lilly has a strong financial position and is committed to returning value to shareholders while reinvesting in growth opportunities.

The key drivers behind Eli Lilly's strong financial performance, such as the growth from Mounjaro and Zepbound, are likely to be sustainable in the long term. The approval of Zepbound for a new indication as the first and only prescription medicine for moderate-to-severe obstructive sleep apnea (OSA) in adults with obesity expands its market potential. This approval, along with the positive topline results from the SURMOUNT-5 Phase 3b open-label randomized trial, where Zepbound (tirzepatide) showed a 47% greater relative weight loss compared to Wegovy (semaglutide) head-to-head, suggests that Zepbound has a strong competitive advantage in the weight loss market. This competitive edge is likely to sustain its growth in the long term.

Eli Lilly's commitment to expanding its manufacturing capacity, including a $3 billion investment to enhance Lilly's global parenteral (injectable) product manufacturing network, indicates a strategic focus on meeting increased demand for its products. This investment is likely to support the sustained growth of Mounjaro and Zepbound by ensuring adequate supply to meet market demand.

The company's strong pipeline progress, including the approval of Omvoh in the U.S. for moderately to severely active Crohn's disease and the positive Phase 3 results from the BRUIN CLL-321 trial evaluating pirtobrutinib, suggests that Eli Lilly has a robust pipeline of innovative products. This pipeline strengthens the company's long-term growth prospects by providing a steady stream of new products to replace or supplement existing ones.

Eli Lilly's 2025 guidance, with revenue in the range of $58.0 billion to $61.0 billion and EPS in the range of $22.05 to $23.55, indicates a strong outlook for continued growth. This guidance is supported by the company's momentum from 2024, where it had "major data readouts for tirzepatide in treating chronic disease associated with obesity, invested billions more in expanding our manufacturing capacity and launched Kisunla and Ebglyss — important drivers of our long-term balanced growth outlook."

In conclusion, Eli Lilly and Company's recent financial performance, coupled with its strong dividend history and growth prospects, positions it as a high-growth dividend-paying stock. The key drivers behind its strong financial performance, such as the growth from Mounjaro and Zepbound, are likely to be sustainable in the long term due to their competitive advantages, the company's strategic investments in manufacturing capacity, a robust pipeline of innovative products, and a strong financial outlook. Investors looking for a high-growth dividend-paying stock should consider Eli Lilly and Company as a compelling investment opportunity.