8. Eli Lilly and Company (NYSE:LLY)
5-Year Average Dividend Growth: 15.03%
Consecutive Years of Dividend Growth: 10
Eli Lilly and Company (NYSE:LLY) is an Indiana-based pharmaceutical company that manufactures and develops a wide range of medicines for serious ailments. In the second quarter of 2024, Mounjaro, Zepbound, and Verzenio were key drivers of strong financial results, alongside progress in manufacturing expansion efforts. Equally noteworthy is the global growth of the company’s treatments for cancer, neurological disorders, and autoimmune diseases. In addition, the recent approval of Kisunla to assist those with Alzheimer’s disease marks a significant achievement after decades of effort. The company is outperforming the broader market in 2024, returning nearly 61%.
Baron Funds highlighted reasons for Eli Lilly and Company’s (NYSE:LLY) strong returns this year in its Q2 2024 investor letter:
“Shares of global pharmaceutical company Eli Lilly and Company (NYSE:LLY) increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”
Eli Lilly and Company (NYSE:LLY) reported revenue of $11.3 billion in the second quarter of 2024, up 36% from the same period last year. The revenue also beat analysts’ estimates by $1.34 billion. The company’s gross margins also rose 40% to $9.13 billion in Q2 2024, with the gross margin as a percentage of revenue reaching 80.8%, up by 2.5 percentage points. This improvement was mainly due to a favorable product mix and higher realized prices, though it was slightly offset by increased production costs.
Eli Lilly and Company (NYSE:LLY) is a strong dividend payer, offering regular payouts to shareholders since 1885. In addition, the company has raised its payouts for 10 consecutive years, with its 5-year average annual dividend growth of over 15%. It pays a quarterly dividend of $1.30 per share and has a dividend yield of 0.55%.
According to Insider Monkey’s database of Q2 2024, 100 hedge funds owned stakes in Eli Lilly and Company (NYSE:LLY), down from 109 in the previous quarter. The total value of these stakes is over $16 billion. With nearly 5 million shares, Fisher Asset Management was the company’s leading stakeholder in Q2.
