Eli Lilly and Company (NYSE:LLY) in the Context of Long-Term Investment
We have recently published an article listing the 10 Best Long Term Stocks to Invest in According to Billionaires. In this piece, we will examine where Eli Lilly and Company (NYSE:LLY) fits among other top long-term stock investments.
Historically, dividend-paying stocks have been regarded as a reliable component of investment portfolios, providing consistent income and mitigating the effects of market fluctuations. However, there are times when these stocks underperform relative to the broader market, often eclipsed by more high-profile investment opportunities. For instance, dividend stocks lagged in performance recently as investors leaned towards technology stocks. However, following a market correction and increased pressure on tech shares due to tariffs imposed by Trump, dividend stocks have started to recapture the interest of investors.
The Dividend Aristocrats Index, tracking companies with 25 consecutive years of dividend growth, has experienced a nearly 2% decline since the beginning of 2025, in contrast to an almost 8% drop in the broader market. This indicates a resurgence of dividends, with an increasing number of companies instituting dividend policies and existing payers raising their dividends to attract investors. According to S&P Global’s findings, in 2025, 408 companies are expected to pay dividends, with approximately 350 projected to increase their payouts over the next four quarters, contributing to an estimated 6% year-over-year growth in total dividends. Overall, U.S. market aggregate dividend growth is anticipated to be 4.6% for 2025.
The appeal of dividend-paying stocks endures, especially for investors who aim to reduce risks while still seeking growth potential. Ramona Persaud, portfolio manager of the Fidelity Equity-Income and Fidelity Global Equity Income Funds, prefers high-quality firms that offer strong dividends and are reasonably priced. She highlighted that falling interest rates can create a favorable climate for dividend stocks, making their yields more attractive compared to bonds. Persaud mentioned that lower rates could foster broader market gains, rather than the recent performance driven primarily by a handful of mega-cap growth companies.
Persaud’s investment strategy focuses on firms with strong balance sheets, stable cash flows, and high growth potential. She underscored the importance of valuation, searching for stocks that are well-priced relative to their competitors and historical standards, while also aiming for standout dividend yields. This blend of quality, valuation, and income has purportedly allowed her fund to perform well in both rising and declining markets. She expressed her sentiments regarding the allure of dividend stocks:
“Ideally, I look for a stock that has a combination of these factors. I can’t always get all 3, so I look for a good balance of them. If I can get higher quality at a cheaper price, and the company pays a compelling dividend, that’s when a stock is really interesting to me.”
To create the aforementioned list, we filtered for dividend stocks with robust financial health and solid dividend policies, selecting 10 companies favored by billionaire investors based on Insider Monkey’s billionaire database from Q4 2024, ranked by the number of billionaires invested in them. Furthermore, at Insider Monkey, we monitor hedge funds closely. Our research indicates that mimicking the choice stocks of top hedge funds can yield better returns. Our quarterly newsletter employs a strategy that selects 14 small-cap and large-cap stocks each quarter, achieving a 373.4% return since May 2014, notably surpassing its benchmark by 218 percentage points.
Eli Lilly and Company (NYSE:LLY), based in Indiana, is a multinational pharmaceutical firm offering a diverse array of services and products. It has gained significant popularity among investors due to its advancements in GLP-1 treatments, including approved drugs Zepbound for weight loss, and Mounjaro for diabetes management. The anticipated substantial revenues from these products have led to optimistic growth expectations. Furthermore, excitement surrounds Kisunla, an Alzheimer’s treatment authorized last year, which could also be a significant revenue source. Eli Lilly is also actively exploring new growth avenues, such as their partnership with Aktis Oncology to develop targeted radiopharmaceutical treatments for cancer. The company adheres to a strong dividend policy, currently distributing $1.50 per share quarterly and maintaining an 11-year trend of uninterrupted dividend increases, supporting a dividend yield of 0.79% as of April 15.
In summary, LLY ranks 2nd among the best long-term dividend stocks as identified by billionaires. While we see the potential in LLY as an investment, we believe deeper undervalued dividend stocks may offer even more promising returns in a shorter timeframe. For investors interested in a potentially undervalued dividend stock that trades at 10 times its earnings with annual double-digit growth, we recommend checking out our report on a dirt cheap dividend stock.
