The has not been a banner year for Eli Lilly (NYSE: LLY). Nevertheless, the pharmaceutical giant just enacted a fresh dividend raise, bumping its upcoming quarterly dividend to $0.52 per share, 2% higher than its predecessor.
In recent years, the company has lifted its distribution once annually around this time. Its previous raise occurred in December 2015, and also amounted to a 2% bump.
News of the latest payout hike didn’t stop Eli Lilly’s stock price from slipping a bit Monday. The company is still suffering the fallout from the results of a late-stage clinical trial of its Alzheimer’s treatment candidate solanezumab, which indicated that the drug’s effectiveness was limited.
That greatly displeased investors, who were hoping that solanezumab would become a blockbuster product for the company. After the results were made public, the share price plunged nearly $8 to $68. The stock has yet to recover; it trades at around $67.60 just now. It began this year at over $84 per share.
In spite of that disappointment, management remains optimistic. It is expecting annual average revenue growth of at least 5% in the 2015 to 2020 period, and believes it will post wider profit margins. It also plans to continue raising its dividend every year.
Eli Lilly’s new distribution is to be paid on March 10, to stockholders of record as of Feb. 15. At the most recent closing share price, it would yield 3.1%. That’s well above the current 2% average of dividend-paying stocks on the S&P 500.
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Eric Volkman has no position in any stocks mentioned.
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