March 17, 2026 a 11:31 am
LLY: Dividend Analysis - Eli Lilly and Company
Eli Lilly and Company (LLY) stands as a stalwart in the pharmaceutical sector, characterized by its remarkable dividend consistency with a 55-year history of uninterrupted payouts. Despite a modest dividend yield of 0.60%, the company shows robust earnings and free cash flow payout ratios, indicating a healthy dividend coverage. Furthermore, the company demonstrates a commendable, stable dividend growth rate which signifies potential for future income appreciation. These factors combined position LLY as an attractive consideration for dividend-oriented investors seeking reliability.
📊 Overview
The overview of Eli Lilly and Company's dividend profile underscores its robust and sustained commitment to dividend payout, characteristic of its sectoral prominence in pharmaceuticals.
| Metric | Value |
|---|---|
| Sector | Pharmaceuticals |
| Dividend yield | 0.60% |
| Current dividend per share | $5.9955 |
| Dividend history | 55 years |
| Last cut or suspension | None |
🗣️ Dividend History
LLY's dividend history exhibits consistency with regular annual increases. This track record showcases the management's commitment to return capital to shareholders, which is paramount for long-term income investors.
| Year | Dividend Per Share (USD) |
|---|---|
| 2026 | $1.73 |
| 2025 | $6.00 |
| 2024 | $5.20 |
| 2023 | $4.52 |
| 2022 | $3.92 |
📈 Dividend Growth
Divident growth is an essential indicator of financial health and LLY demonstrates a steady growth rate over the years. This stability is crucial for attracting long-term investors.
| Time | Growth |
|---|---|
| 3 years | 15.24% |
| 5 years | 15.18% |
The average dividend growth is 15.18% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
The payout ratio is a critical assessment tool to determine the sustainability of a company's dividend policy. LLY's coverage ratios indicate a conservative payout strategy.
| Key Figure | Ratio |
|---|---|
| EPS-based | 26.09% |
| Free cash flow-based | 63.14% |
With a low EPS payout ratio of 26.09% and a modest FCF payout ratio of 63.14%, LLY maintains a sustainable dividend policy, signaling financial prudence.
✅ Cashflow & Capital Efficiency
Evaluating cash flow and capital efficiency provides insights into the liquidity and capital allocation strategies of LLY, underpinning its dividend distributability.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 0.93% | 0.06% | -0.60% |
| Earnings Yield | 2.14% | 1.52% | 1.00% |
| CAPEX to Operating Cash Flow | 46.64% | 95.30% | 174.34% |
| Stock-based Compensation to Revenue | 0.96% | 1.43% | 1.84% |
| Free Cash Flow / Operating Cash Flow Ratio | 53.36% | 4.70% | -74.34% |
The fluctuating metrics in recent years point towards variable cash flow stability, influencing the company's potential to finance dividends and other capital expenditures.
⚠️ Balance Sheet & Leverage Analysis
Analyzing leverage and ratios provides a picture of LLY's financial resilience and its ability to meet long-term obligations.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 160.18% | 237.06% | 234.18% |
| Debt-to-Assets | 37.79% | 42.74% | 39.41% |
| Debt-to-Capital | 61.56% | 70.33% | 70.08% |
| Net Debt to EBITDA | 1.27 | 1.99 | 2.62 |
| Current Ratio | 1.58 | -- | -- |
| Quick Ratio | 1.19 | 0.89 | 0.73 |
| Financial Leverage | 4.24 | 5.55 | 5.94 |
This analysis indicates a stable debt profile with a slight increase in leverage, requiring ongoing monitoring to maintain balance sheet health.
✅ Fundamental Strength & Profitability
Understanding the fundamental and profitability metrics of LLY offers insights into operational efficiency and competitive positioning.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 77.78% | 74.62% | 48.65% |
| Return on Assets | 18.35% | 13.45% | 8.19% |
| Net Margin | 31.66% | 23.51% | 15.36% |
| EBIT Margin | 40.46% | 29.88% | 20.63% |
| EBITDA Margin | 42.86% | 33.81% | 25.11% |
| Gross Margin | 83.79% | 81.31% | 79.25% |
| Research & Development to Revenue | 20.46% | 24.40% | 27.29% |
High returns on equity and assets illustrate LLY's proficiency in utilizing its resources to generate profits, solidifying its market position.
📉 Price Development
📊 Dividend Scoring System
| Criterion | Score | |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 4 |
Overall Score: 32/40
🗣️ Rating
Eli Lilly and Company emerges as a compelling dividend investment for those valuing safety and consistency. With its long-standing history of dividends, a prudent payout ratio, and consistent financial performance, LLY is recommended for income-focused portfolios seeking steady growth. However, investors should remain mindful of its comparatively low yield relative to industry peers.
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