There are always some companies thriving, even when others in the same sector struggle. Right now, the spotlight is on Eli Lilly, a leader in GLP-1 weight loss drugs. It’s trading at a hefty price-to-earnings ratio of 46x, and its dividend yield is relatively low at 0.6%, which is partly influenced by its impressive stock performance.
In contrast, stock prices for competitors like Novo Nordisk and Pfizer have fallen. If you lean towards a contrarian or value-oriented approach, or if dividends are your thing, this might catch your interest. Here’s the scoop:
Eli Lilly’s revenue in 2025 got a significant boost from its diabetes medication Mounjaro and the weight loss drug Zepbound. Mounjaro saw sales spike by 99%, while Zepbound’s sales shot up an impressive 175%. Meanwhile, Novo Nordisk’s obesity medications grew by only 31%. While that’s still solid growth by many standards, it pales in comparison to what Eli Lilly achieved. To make matters a bit more complicated, Novo Nordisk has hinted that its 2026 numbers might take a hit because of a pricing agreement with the U.S. government.
For investors, Novo Nordisk has seen a hefty drop of 66% in its stock since mid-2024, which could signal a potential buying opportunity for those looking for long-term value. Notably, its current P/E ratio is at 13x, and it offers a 3.9% dividend yield, supported by a 40% payout ratio.
On another note, Novo Nordisk is now introducing a GLP-1 pill that could draw in more consumers interested in weight loss. The company expects its performance to rebound starting in 2027.
Pfizer, on the other hand, faced setbacks with its internally developed GLP-1 drug candidate. The company is now trying to catch up with Eli Lilly and Novo Nordisk through various partnerships and acquisitions. However, Pfizer has a lengthy track record of innovation; while it’s not leading the pack right now, it could turn things around, as it has in the past. Beyond GLP-1 drugs, Pfizer has also made advancements in oncology and migraine treatments.
If you’re not particularly interested in turnaround stories, Pfizer could still be a worthwhile addition to your portfolio, especially given its attractive dividend yield of 6.3%, though its payout ratio is currently over 100%.
More conservative dividend seekers might find Novo Nordisk more appealing. But for those who enjoy a bit of contrarian investment, combining dividends with a gamble on current market fluctuations could be an interesting strategy. For what it’s worth, Novo Nordisk’s P/E ratio sits around 20x.
Although both Pfizer and Novo Nordisk are facing challenging stock prices, they could represent opportunities for long-term strategists. Sure, it’s a psychological hurdle to buy when others are selling; nevertheless, there’s value in looking for stocks that offer a better deal compared to the industry leader, Eli Lilly.
Before diving into any investments, especially in Pfizer, it’s wise to weigh the options carefully. For instance, several analysts have identified top-performing stocks, and surprisingly, Pfizer didn’t make the cut this time.
