$LLY · Ale's World of Stocks · 2026-10-29

Today, we need to talk about one of the unstoppable healthcare giants in the market, Eli Lilly, whose ticker symbol is "LLY". On the surface, most small investors tend to focus on the stock's record price performance, without paying much attention to the meager dividend yield of less than 1%.

However, when we delve deeper into the cash flows, we find that Lilly is achieving double-digit dividend growth, with a meager payout ratio of 20%, and an absolute monopoly on the weight-loss drug boom that generates billions for it every quarter.

In our recent analysis of the top dividend growth stocks that BlackRock invests in, Eli Lilly was one of their biggest moves. Today, we are conducting this in-depth analysis to see why institutions are pouring billions into this stock despite it approaching record levels, and whether it could be one of the best long-term dividend growth stocks.

Let's take a closer look at Eli Lilly, of which BlackRock acquired an additional $1.3 billion in the last quarter, bringing its total stake to more than $80 billion. Like other stocks, it is a high-performing stock in terms of share price, consistently setting record levels, which unfortunately results in a dividend yield of less than 1 % based on the current share price .

But what Lily lacks in revenue, it certainly makes up for with tremendous growth in every other aspect. Firstly, both the dividend growth rate and the growth history are comfortably in the double digits .

Most importantly, the distribution ratio is also small, at only about 20%, which is vital and rare for a pharmaceutical giant of this size.

This not only enables them to continue increasing distributions, but also leaves them with huge cash flow to invest in necessities such as clinical trials, factory expansions, and strategic acquisitions, which Lilly has done brilliantly in recent years.

We'll get to that in a bit, but first, let me show you the percentage calculator again, this time from Lilly. If you had bought the stock 10 years ago, its price would have been around $67 per share.

When you calculate the current dividend per share that you could have received for $67 , you would get approximately $7 in dividends per share, which translates to a return of over 10%.

Now, can you imagine owning shares of Eli Lilly today?

This is one of the biggest growth monsters in the pharmaceutical sector, isn't it? Every investor in the pharmaceutical sector wants to own Lilly shares because of the tremendous growth it is achieving.

Can you imagine that it also distributes profits with a return of more than 10%?

You certainly wouldn't have expected to see that from a company like Eli Lilly. But again, this is the power of investing in dividend growth . You just need to get in early, then invest for the long term.

Can you imagine how strong Eli Lilly's stock performance is? It is literally the biggest giant in the pharmaceutical sector right now in terms of market capitalization because the share price has risen so much.

However , you can also get a huge dividend yield from it. But again, you need to be a long-term investor to make that happen. Well, saying that, once again, Eli Lilly was executing those strategies you would normally expect from pharmaceutical giants almost perfectly.

Their hugely successful injectable drugs , Zipbound and Mongaro for treating obesity and diabetes , have become a massive source of income for them, generating billions of dollars in sales with growth of 46% and 91% respectively in the last quarter alone.

Together, these products helped Lilly capture more than 60% of that total market. They are also expanding with new releases that are showing very strong results.

They have made several new acquisitions. Some of them involve integrating artificial intelligence technologies into their work.

They also announced partnerships in the field of artificial intelligence. They have even completed the construction of their new supercomputer, "Lilypad," which is now considered the most powerful biotechnology supercomputer in the world, powered by more than a thousand Nvidia "Blackwell" graphics processing units .

This will greatly enhance their product line, their drug discovery platform, and everything like that. So there is a lot to look forward to in the future as well. Because of all this, analysts expect amazing growth that will continue in their revenues and profits, which are already considered industry leaders given their huge size.

I mean, do you want to talk about growth? Lilly meets all the criteria and is a perfect fit for what a dividend growth investor is looking for in this type of category. Even the stock's valuation benefits from all that growth, because it has pushed the price-to-earnings-to-growth (PEG) ratio to levels below the sector average, if you can believe it.

This is precisely why BlackRock continues to increase its stake in Eli Lilly. When a company controls more than 60% of the GLP-1 market, builds the world's most powerful biotechnology supercomputer , and yet still trades at a price-to-earnings (PE) ratio cheaper than the sector.

It truly is what you would call a first-rate cumulative growth machine .

But remember, Lilly was just one of five companies with growing dividends that BlackRock acquired in the last quarter.

And if you'd like to see the other four giants, including the semiconductor options and cloud computing names that we ranked higher on our list, be sure to check out the full weekend analysis linked here on screen and below in the description.

But for now, be sure to share your thoughts on Lily's stock in the comments below, and I'll see you in the next segment.