Abbott Laboratories vs Eli Lilly Which Is a Better Investment?

Abbott Laboratories and Eli Lilly are two major players in the healthcare and pharmaceutical industries, each boasting a long history of innovation and success. While Abbott Laboratories has a diverse portfolio of medical devices, diagnostics, and nutritional products, Eli Lilly focuses primarily on developing pharmaceutical drugs. Both companies have enjoyed steady growth in their respective markets, but investors may be drawn to Abbott's consistent performance and strong presence in healthcare technologies, while others may favor Eli Lilly's focus on cutting-edge drug development.

Abbott Laboratories or Eli Lilly?

When comparing Abbott Laboratories and Eli Lilly, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Abbott Laboratories and Eli Lilly.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Abbott Laboratories has a dividend yield of 1.9%, while Eli Lilly has a dividend yield of 0.63%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Abbott Laboratories reports a 5-year dividend growth of 12.74% year and a payout ratio of 65.30%. On the other hand, Eli Lilly reports a 5-year dividend growth of 14.97% year and a payout ratio of 54.12%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Abbott Laboratories P/E ratio at 34.77 and Eli Lilly's P/E ratio at 88.99. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Abbott Laboratories P/B ratio is 5.04 while Eli Lilly's P/B ratio is 52.31.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Abbott Laboratories has seen a 5-year revenue growth of 0.33%, while Eli Lilly's is 0.81%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Abbott Laboratories's ROE at 14.74% and Eli Lilly's ROE at 65.15%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $115.10 for Abbott Laboratories and $825.69 for Eli Lilly. Over the past year, Abbott Laboratories's prices ranged from $99.71 to $121.64, with a yearly change of 21.99%. Eli Lilly's prices fluctuated between $561.65 and $972.53, with a yearly change of 73.16%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.