1. Eli Lilly and Company (NYSE:LLY)
Upside Potential as of December 13: 32.12%
Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company that manufactures and develops a wide range of medicines for serious ailments. In fiscal Q4 2024, the company reported $11.4 billion in revenue, marking a 20.5% increase from the same quarter last year. The company saw strong growth from Mounjaro and Zepbound, as well as a significant 17% rise in non-incretin revenue. This overall growth, driven by its oncology, immunology, and neuroscience portfolios, was compared to the results from Q3 2023.
Eli Lilly and Company (NYSE:LLY) received encouraging news for its weight loss programs, as President Joe Biden recently suggested expanding Medicare and Medicaid coverage to include these medications. If the proposal is approved, it could make these treatments accessible to millions more patients, potentially leading to a significant increase in sales. Although the proposal’s outcome is still uncertain, the market remains hopeful about the potential advantages for Eli Lilly. Due to these positive developments, the stock has surged by over 33.4% since the start of 2024.
Aristotle Atlantic Partners, LLC made the following comment about LLY in its Q3 2024 investor letter.
“Eli Lilly and Company (NYSE:LLY) is a leading pharmaceutical company that develops diabetes, oncology, immunology and neuroscience medicines. The company generates over half of its revenue in the U.S. from its leading drugs Trulicity, Verzenio and Taltz. The company operates in a single business segment: human pharmaceutical products.
Eli Lilly has a deep pipeline in treatment areas focused on metabolic disorders, oncology, immunology and central nervous system disorders. Currently, there are two phase-three assets: orforglipron, an oral GLP-1, and retatrutide, a triple incretin agonist, which could possibly expand upon the potential success of Mounjaro. We believe that Mounjaro has the potential to commercialize beyond Type 2 diabetes and obesity, potentially in the areas mentioned above of heart disease, sleep apnea, fatty liver disease and chronic kidney disease. We believe the premium valuation is supported by this outsized growth profile.”
On December 10, Eli Lilly and Company (NYSE:LLY) hiked its quarterly dividend by 15.4% to $1.50 per share. Through this increase, the company stretched its dividend growth streak to 11 years, earning it a reputation as one of the best dividend stocks. The stock offers a dividend yield of 0.76%, as of December 13.
The number of hedge funds tracked by Insider Monkey holding stakes in Eli Lilly and Company (NYSE:LLY) increased to 106 in Q3 2024, from 100 in the previous quarter. The total value of these holdings now exceeds $18.5 billion.
Overall, Eli Lilly and Company (NYSE:LLY) ranks first on our list of the best dividend stocks. While we acknowledge the potential for LLY to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.