Eli Lilly: A Top Pharma Dividend Stock for 2024?

Eli Lilly and Company (LLY) has long been a favorite among income-oriented investors, thanks to its consistent dividend payouts and strong financial performance. As we approach 2024, the question remains: is Eli Lilly the best pharma dividend stock to buy? Let's examine the company's dividend history, financial health, and growth prospects to determine if it deserves a spot in your portfolio.



Eli Lilly has a rich history of paying dividends, with a current annual payout of $6.00 per share, representing a yield of 0.78%. While this yield may not be as high as some of its peers, it is important to consider the company's dividend growth rate and overall financial performance.



Eli Lilly's dividend growth rate has been steady, with an average annual increase of approximately 7.5% over the past two decades. While this growth rate may not be as high as some of its peers, such as Pfizer or Merck, it is still a healthy and sustainable pace. Moreover, Eli Lilly's strong financial performance and earnings growth support its ability to continue paying and potentially increasing dividends in the future.



Eli Lilly's financial health is robust, with a strong balance sheet and manageable debt levels. The company's Total Cash of $3.518 billion and Free Cash Flow of -$1.307 billion indicate a solid foundation for dividend payments. Additionally, Eli Lilly's debt is well-covered by earnings, with a Debt/EBITDA ratio of 1.64 and an interest coverage ratio of 10.33. These metrics suggest that the company has a manageable debt burden and sufficient earnings to cover its interest expenses.



Eli Lilly's earnings growth rate has been moderate, with a 5-year average of 0.204. While this growth rate may not be as high as some of its peers, it is still a healthy and sustainable pace. Moreover, Eli Lilly's strong pipeline of innovative drugs, including Mounjaro and Zepbound for weight loss and type 2 diabetes, as well as its collaborations with other pharmaceutical companies, further enhance its growth prospects.



In conclusion, Eli Lilly and Company (LLY) remains a strong contender for the best pharma dividend stock to buy in 2024. Its consistent dividend payouts, steady dividend growth, robust financial health, and strong pipeline of innovative drugs make it an attractive option for income-oriented investors. While the company's dividend yield may not be as high as some of its peers, its overall financial performance and growth prospects support its ability to continue paying and potentially increasing dividends in the future. As always, it is essential to conduct thorough research and consider your investment goals and risk tolerance before making any investment decisions.