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Reuben Gregg Brewer, The Motley Fool
Thu, May 28, 2026 astatine 11:35 AM CDT 5 min read
The headline-grabbing conflict successful the pharmaceutical assemblage contiguous pits Eli Lilly (NYSE: LLY) against Novo Nordisk (NYSE: NVO). The battlefield is GLP-1 value nonaccomplishment drugs. This is simply a caller benignant of cause that has been thing of a occurrence for radical who person agelong struggled with value loss. And the semipermanent accidental is huge.
Right now, Eli Lilly is successful the wide lead, with its highly palmy Mounjaro and Zepbound. But Novo Nordisk hasn't fixed up; it precocious released a pill mentation of Wegovy. The contrarian presumption of this contention is that investors are giving Eli Lilly excessively overmuch recognition and Novo Nordisk excessively little. Here's wherefore dividend investors should spell with Novo Nordisk.
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Novo Nordisk has its enactment chopped retired for it
Novo Nordisk was the archetypal to marketplace with a GLP-1 drug. That caput commencement didn't past long, arsenic the institution struggled to conscionable demand. This information allowed compounders to marque generic versions of Wegovy successful the important U.S. market. Meanwhile, Eli Lilly's Mounjaro and Zepbound proved much effectual and rapidly gained marketplace share.
The show quality betwixt the 2 companies successful the value nonaccomplishment abstraction is material. In the archetypal 4th of 2026, Novo Nordisk's obesity attraction business, its Wegovy franchise, grew 22%. Eli Lilly saw income of Mounjaro and Zepbound summation 125% and 80%, respectively, successful the aforesaid quarter.
That said, the Wegovy pill appears to beryllium much effectual than Eli Lilly's GLP-1 pill offering, which is simply a antithetic cause from its highly palmy Mounjaro and Zepbound. Importantly, Novo Nordisk's pill appears to beryllium attracting caller customers to the GLP-1 space, arsenic galore radical don't similar taking shots. The large takeaway present is that the pharmaceutical manufacture is intensely competitory and Eli Lilly doesn't person a fastener connected the GLP-1 market. Or, to enactment that different way, Novo Nordisk is behind, but it isn't retired of the race.
Novo Nordisk wins connected output and valuation
Eli Lilly is simply a well-run healthcare business, and there's nary crushed to merchantability it if you ain it. However, it is hard to contradict that the banal is richly valued. While its price-to-earnings ratio is beneath its five-year mean of astir 57x, it is inactive rather precocious astatine 37x. The mean cause stock's P/E is simply a interaction nether 24x. On the dividend front, the mean cause stock's output is astir 1.7% portion Eli Lilly's is 0.65%.
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