Novo Nordisk vs Eli Lilly Which Outperforms?

Novo Nordisk and Eli Lilly are two pharmaceutical giants renowned for their contributions to the healthcare industry. Both companies have a strong foothold in the market, with a focus on providing innovative solutions for diabetes management and other chronic diseases. Novo Nordisk, a Danish company, is known for its insulin products, while Eli Lilly, based in the US, offers a wide range of medications. Investors often compare these two stocks due to their similar focus and competitive market positions.

Novo Nordisk or Eli Lilly?

When comparing Novo Nordisk 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 Novo Nordisk 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. Novo Nordisk has a dividend yield of 1.33%, while Eli Lilly has a dividend yield of 0.66%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Novo Nordisk reports a 5-year dividend growth of 10.33% year and a payout ratio of 46.60%. 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 Novo Nordisk P/E ratio at 36.38 and Eli Lilly's P/E ratio at 84.22. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Novo Nordisk P/B ratio is 28.60 while Eli Lilly's P/B ratio is 49.50.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Novo Nordisk has seen a 5-year revenue growth of 1.24%, while Eli Lilly's is 0.81%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Novo Nordisk's ROE at 86.40% 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 $108.56 for Novo Nordisk and $778.39 for Eli Lilly. Over the past year, Novo Nordisk's prices ranged from $96.53 to $148.15, with a yearly change of 53.48%. 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.