Picking a solid dividend stock to own for the long haul isn't necessarily easy. Balancing safety and dividend income can make it challenging to find the right stock to own, one that offers a fairly high yield, which isn't too risky. If the dividend is likely to grow in value is also an important consideration, as that can give investors an incentive to buy and hold.
Two intriguing dividend stocks that can be appealing options to investors today are Eli Lilly (NYSE:LLY) and Pfizer (NYSE:PFE). The former has been raising its dividend at a high rate for years, while the latter has an incredibly high yield. Which one is the best option for dividend investors today?
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"Act 2" is the global rollout. Continue » Although Eli Lilly's dividend yields just around 0.6% right now, it has been an excellent income investment to own over the years. If not for the stock's tremendous 400% gains over the past five years, its yield would be far greater than it is today.
A big incentive for holding onto the healthcare stock is the dividend growth. Eli Lilly, because it generates monstrous profits due to its highly effective and successful GLP-1 drugs, has had no trouble raising its payouts. Its current quarterly dividend is $1.73, and that is more than twice what investors were collecting from the healthcare stock five years ago, when the quarterly payout was $0.85.
That amount of dividend growth computes to a compounded annual growth rate of 15.3% -- far higher than the rate of inflation. While Eli Lilly's yield may seem modest, it can become far bigger in the future (depending on how its stock performs). But with strong profits and promising growth opportunities in the GLP-1 market, Eli Lilly is an enticing all-around stock to own.
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