Why Eli Lilly Stock Is Up 4% Today
A company’s dividend isn’t the only reason investors like its stock these days, but it certainly helps.
The world’s largest pharmaceutical company by market capitalization, ellie lily (Ellie 4.31%), continues to share a portion of its profits with shareholders. The company maintained its quarterly dividend payments and declared a new distribution on Monday. Investors love receiving cash from companies, and this payout is a generous amount compared to just a few months ago.
New dividend declaration
That morning, Eli Lilly announced that its next quarterly dividend would be $1.30 per share, equal to the previous quarter’s dividend. This will be paid out on June 10th to shareholders of record as of May 16th.
Late last year, the pharmaceutical giant enacted a dividend increase, raising the payout by 15% from $1.13 per share to its current level. However, because the company’s stock price has risen faster than that, the dividend yield on the increased amount is only 0.7%. Not only is this lower than the average of 1.3%; S&P 500 Although it is an index stock, it has been overshadowed by its competitors in the pharmaceutical sector.
But in this case, dividends are icing on the Eli Lilly cake, and they are welcome. The company is currently receiving some well-deserved attention for its repackaged diabetes drug Zepbound, which recently received Food and Drug Administration (FDA) approval for obesity.
This has helped Eli Lilly grow into a fast-growing and in-demand segment of the pharmaceutical market. Especially in the United States, obesity has become a problem, and many people are looking for relatively easy weight loss drugs.
Stable and growing payouts
Eli Lilly has never been considered a top dividend stock and probably never will be. Nonetheless, the fact that it is a steady and reliable payer that habitually increases its payments once a year adds to the company’s appeal. If Zepbound is as successful as many expect, shareholders can expect higher dividend increases in the future.
Eric Volkman has no positions 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.
