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Eli Lilly’s Earnings Quality and Dividend Performance

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Eli Lilly’s dividend performance

Eli Lilly and Company (LLY) has announced the following interim dividends year-to-date:

  • It announced a first-quarter interim dividend of $0.5625 on December 11, 2017.
  • It announced a second-quarter interim dividend of $0.5625 on May 8, 2018.
  • It announced a third-quarter interim dividend of $0.5625 on June 18, 2018.

Eli Lilly’s dividend yield is 2.11%. Its dividend yield last year was 2.46%, and its five-year average is 2.77%.

The above chart compares the changes in Eli Lilly’s earnings quality score since the first quarter of 2017.

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Earnings quality

Earnings quality is a measure referring to a company’s ability to predict its future earnings based on its reported earnings. The company’s earnings quality (or EQ) score is measured on a scale of 0–100, where 100 is considered the best. The components of the EQ score include accruals, cash flows, operating efficiency, and exclusions.

Eli Lilly’s EQ score is 95 compared to the industry median of 33. Eli Lilly’s EQ score is much higher than the industry median, signifying higher earnings quality compared to its peers.

The company’s score for accruals is 87, while its score for cash flows is 91, and its score for operating efficiency is 97. Its score for exclusions is 5.

Eli Lilly’s EQ score increased from 89 to 95 based on its earnings in the second quarter. Its accruals component score increased from 62 to 87 during the quarter. Its exclusions component score decreased from 23 to 5 in the quarter.

The VanEck Vectors Morningstar Wide Moat ETF (MOAT) holds 1.5% of its total investments in Eli Lilly, 1.4% in Bristol-Myers Squibb (BMY), 2.5% in Gilead Sciences (GILD), and 2.6% in Biogen (BIIB).

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