This One Drugmaker Has Paid Dividends the Past 120+ Years

This One Drugmaker Has Paid Dividends the Past 120+ Years May 4, 2017
By Alex Keown, BioSpace.com Breaking News Staff

NEW YORK – When it comes to buying stock in a company, investors want to see a return on the money they have spent. One pharma company has proven year in and year out that it’s a solid investment, according to a Motley Fool analyst.

Since 1885, Indianapolis-based Eli Lilly has paid a dividend to its shareholders, Dan Caplinger, an independent financial consultant, said in his column highlighting 10 companies that have paid dividends for more than a century. Of Eli Lilly , the only pharma company on his list, Caplinger said Lilly’s 2.5 percent dividend yield is solid. However, he noted that the company does not have a “long streak” of annual dividend increases.

“After more than 40 years of consecutive boosts, Lilly kept its dividend flat in the aftermath of the 2008-2009 financial crisis. For now, Lilly has focused on making the most of its drug opportunities, and investors are sharing the bounty,” Caplinger said.

Investors should take note that in March Eli Lilly announced plans to invest $850 million into U.S. operations over the course of this year, with an intense focus on its diabetes lines. Lilly said the investments will span the company’s U.S. operations including research laboratories, manufacturing sites, and general and administrative areas. The investment is a move that will ensure investors the company is committed to its manufacturing and pipeline. The company said the investment will allow Lilly to expand its diabetes products manufacturing operations in the U.S., which includes a new $140 million insulin cartridge production facility. Additionally, Eli Lilly said it will invest $85 million to expand manufacturing of its Trulicity-branded diabetes injection device.

The investments are being driven by demand for Lilly products, as well as its robust pipeline of potential medicines in development targeting cancer, pain, diabetes and other unmet medical needs, the company said in a statement. Diabetes manufacturing has been a key component for Lilly’s growth. For the four years between 2012 and 2016, Lilly has invested approximately $1.1 billion to boost its diabetes products manufacturing operations in the United States.

That increased investment comes several months after the failure of its Alzheimer’s drug, solanezumab. The company also saw a setback in April when the U.S. Food and Drug Administration rejected its application for baricitinib, a once-daily oral JAK inhibitor, for moderate-to-severe rheumatoid arthritis. In its complete response letter, the FDA said it needed more clinical data on dosing, as well as more data to address broad safety concerns.

Since the FDA’s letter, shares of Eli Lilly have not yet recovered from its one-year high of $86.25 on April 12. Shares of Eli Lilly are up this morning, trading at $81.92.

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