The drug maker boasts a generous dividend yield, a substantial share buyback program, a new cancer drug and several promising drugs in development.
Lilly -- whose shares traded Thursday morning at $63.16, up 16 cents -- has a dividend yield of 3.2%, compared with 1.9% for the Standard & Poor's 500 Index. The stock, which trades at 17.6 times this year's estimated earnings, has risen 23.5% so far this year, compared with an 8.2% gain for the S&P 500.
The company is the middle of $5 billion share buyback program which it launched last year.
In April, Lilly received approval for its stomach cancer drug, Cyramza. According to Bloomberg, analysts say the drug could generate $1 billion in annual sales. That would help offset the loss in sales from osteoporosis drug Evista, which lost patent protection in March, and the probable loss in sales from Cymbalta, a depression treatment that has been Lilly's top-selling drug but that will lose market exclusivity after this year,
Last week, Lilly reported positive results for its late-stage studies of its psoriasis treatment, ixekizumab. It plans to submit the drug for regulatory review during the first half of next year.
On the diabetes front, in June, Abasria, an insulin made by Lilly that is similar to Sanofi's (SNY) Lantus, was backed by the European Medicines Agency's Committee for Medicinal Products for Human Use, paving the way for the drug's acceptance in the European Union. Sanofi is suing Lilly to block an introduction of Abasria in the U.S.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
TheStreet Ratings team rates LILLY (ELI) & CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate LILLY (ELI) & CO (LLY) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
- You can view the full analysis from the report here: LLY Ratings Report