Altria vs. Eli Lilly: What's the Better Stock for Dividend Investors?

Core Viewpoint - Altria offers a high dividend yield of 7%, significantly above the S&P 500 average of 1.3%, but faces growth challenges and modest dividend increases, while Eli Lilly provides a lower yield of less than 1% but has shown impressive dividend growth [1][2]. Group 1: Dividend Performance - Altria has raised its dividend for 55 consecutive years, while Eli Lilly's streak began in 2015, indicating a longer history for Altria but not necessarily better growth potential [2]. - In the past five years, Altria's dividend has increased by just over 21%, whereas Eli Lilly's dividends have doubled, showcasing a stark difference in growth rates [4]. Group 2: Stock Performance and Valuation - Eli Lilly's stock has surged by 476% over the past five years, compared to Altria's 52% increase, which lags behind the S&P 500's more than 116% return [5]. - The high performance of Eli Lilly's stock has led to a lower yield, as the stock becomes more expensive relative to its dividend payouts [5]. Group 3: Future Growth Potential - Eli Lilly is experiencing significant growth, particularly in the GLP-1 weight loss market, while Altria faces uncertainty due to declining tobacco use [6]. - Long-term investors may find Eli Lilly to be a better dividend stock despite its current lower yield, as Altria risks potential dividend cuts if profits decline [7][9]. Group 4: Market Outlook - Eli Lilly's elevated valuation may limit future returns, but if returns moderate and the company continues to increase dividends, its yield could rise, making it an attractive long-term investment [8].