Financial Analysis: Eli Lilly and (LLY) & Abbott Laboratories (ABT)
Eli Lilly and (NYSE: LLY) and Abbott Laboratories (NYSE:ABT) are both large-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitability.
This table compares Eli Lilly and and Abbott Laboratories’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eli Lilly and||11.12%||28.71%||10.74%|
Earnings and Valuation
This table compares Eli Lilly and and Abbott Laboratories’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Eli Lilly and||$22.00 billion||3.77||$5.99 billion||$2.31||34.00|
|Abbott Laboratories||$23.61 billion||3.69||$5.14 billion||$0.71||70.63|
Eli Lilly and has higher revenue, but lower earnings than Abbott Laboratories. Eli Lilly and is trading at a lower price-to-earnings ratio than Abbott Laboratories, indicating that it is currently the more affordable of the two stocks.
Eli Lilly and pays an annual dividend of $2.08 per share and has a dividend yield of 2.6%. Abbott Laboratories pays an annual dividend of $1.06 per share and has a dividend yield of 2.1%. Eli Lilly and pays out 90.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Abbott Laboratories pays out 149.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eli Lilly and has increased its dividend for 2 consecutive years and Abbott Laboratories has increased its dividend for 44 consecutive years. Eli Lilly and is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent recommendations and price targets for Eli Lilly and and Abbott Laboratories, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eli Lilly and||1||6||11||0||2.56|
Eli Lilly and presently has a consensus target price of $88.76, indicating a potential upside of 13.00%. Abbott Laboratories has a consensus target price of $52.83, indicating a potential upside of 5.35%. Given Eli Lilly and’s higher probable upside, equities analysts plainly believe Eli Lilly and is more favorable than Abbott Laboratories.
Risk and Volatility
Eli Lilly and has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Abbott Laboratories has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.
Insider & Institutional Ownership
75.8% of Eli Lilly and shares are held by institutional investors. Comparatively, 71.6% of Abbott Laboratories shares are held by institutional investors. 0.2% of Eli Lilly and shares are held by company insiders. Comparatively, 0.8% of Abbott Laboratories shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Eli Lilly and beats Abbott Laboratories on 11 of the 17 factors compared between the two stocks.
About Eli Lilly and
Eli Lilly and Company is engaged in drug manufacturing business. The Company discovers, develops, manufactures and markets products in two segments: human pharmaceutical products and animal health products. The Company’s human pharmaceutical business segment sells medicines, which are discovered or developed by its scientists. Its animal health business segment operates through the Company’s Elanco division, which develops, manufactures and markets products for both food animals and companion animals. The Company’s human pharmaceutical products include endocrinology products, neuroscience products, oncology products, immunology products and cardiovascular products. The Company’s animal health products segment includes products for food animals and products for companion animals. As of December 31, 2016, the Company manufactured and distributed its products through facilities in the United States, Puerto Rico and 14 other countries.
About Abbott Laboratories
Abbott Laboratories is engaged in the discovery, development, manufacture and sale of a range of healthcare products. The Company operates through four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Vascular Products. Its Established Pharmaceutical Products include a range of branded generic pharmaceuticals manufactured around the world and marketed and sold outside the United States. Its Diagnostic Products include a range of diagnostic systems and tests. Its Nutritional Products include a range of pediatric and adult nutritional products. Its Company’s Vascular Products include a range of coronary, endovascular, vessel closure and structural heart devices for the treatment of vascular disease. The Company, through St. Jude Medical, Inc., also offers products, such as rhythm management products, electrophysiology products, heart failure related products, vascular products, structural heart products and neuromodulation products.
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