How to buy Eli Lilly stock (LLY)
Few American companies have had as profound of an impact on public health as Eli Lilly (LLY). Since the late 1800s, this pharmaceutical titan has pioneered products for many health conditions, including diabetes and cancer. Given Eli Lilly's long history of innovation, many investors view it as a great way to add healthcare exposure to their portfolios.
While Eli Lilly has much to offer as an investment, there are a few pros and cons to consider before buying shares. Before learning how to buy Eli Lilly stock, take a closer look into this big pharma firm's pipeline.
How to buy Eli Lilly stock
Eli Lilly often ranks as one of the largest pharmaceutical companies in market cap, so it's usually not hard to find on brokerages. As long as a trading site offers US-listed stocks, chances are you won't have an issue adding Eli Lilly shares to your account.
- 1.
Sign up for a reputable brokerage: Find a brokerage platform that offers access to American stocks, and double-check that Eli Lilly is one of its offerings. To help decide which brokerage to join, contrast each site's reputation, features and fees, and compare each one against your preferences.
- 2.
Fund your trading account: When you have a stock trading account, you'll need to choose a way to send cash. Typically, brokerages let you link a bank account for ACH deposits, but other methods may include wire transfers, debit cards, or even fintech solutions such as PayPal.
- 3.
Find Eli Lilly's stock: Find your brokerage's search tab and type the ticker "LLY" to find Eli Lilly's price chart. You should see today's price for Eli Lilly shares and the option to buy or sell.
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Decide how much you want to buy: Traditionally, you could only buy whole shares of companies like Eli Lilly, but some brokerages now offer "fractional shares." As long as you're above the minimum requirement, you can buy as many Eli Lilly shares as you want.
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Choose a buy order type: Market buy orders are the fastest to fill, but they have greater uncertainty since they close immediately after you place them. If you want greater control over your trade, use a "limit buy order" to set the price you want to pay per Eli Lilly share.
- 6.
Complete your transaction: Review any fees you have to pay and confirm your buy request. You should soon see LLY shares in your account, and you can monitor the price performance on your brokerage platform.
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About Eli Lilly & Co.
In 1876, Colonel Eli Lilly opened a small pharmaceutical laboratory in Indianapolis. Over the decades, this small lab started to gain a reputation for developing effective medicines at scale, including insulin in the 1920s and the polio vaccine in the 1950s. Eli Lilly & Co. continued making medical breakthroughs, including drugs like Trulicity for diabetes, Verzenio for cancer and Prozac for depression. Moving forward, Eli Lilly's team remains focused on producing industry-leading pharmaceuticals, including the Alzheimer's drug Donanemab1 and the obesity drug Orforglipron2.
Is Eli Lilly a good stock to buy?
Eli Lilly has been a strong investment over the past decade, rising from a share price of $51 at the start of 2014 to $767 at the end of 2024 (or a nearly 1,400% return). Compared with the S&P 500's return of about 200%3 in the same timeframe, Eli Lilly handily beat the US benchmark index. Keep in mind that Eli Lilly has rewarded investors with a dividend since 1982, as well as frequent multi-billion-dollar buybacks.
There's no question Eli Lilly has been a phenomenal choice over the past decade, and it remains one of the biggest "blue-chip" names in the pharmaceutical industry. However, there's no way to know whether this rapid growth can continue.
Pros and cons of buying Eli Lilly stock
Pros
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Strong history and portfolio: With its history dating back almost 150 years, Eli Lilly has a solid track record for developing and marketing successful treatments for numerous diseases.
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Defensive sector: Since pharmaceutical companies offer essential medicines, they tend to resist economic woes like recessions or inflation. This makes Eli Lilly more resilient during economic downturns than companies in cyclical sectors.
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Impressive pipeline: Eli Lilly continues introducing drugs that could become game-changers for many conditions. For example, the FDA-approved Zepbound4 shows positive results in clinical trials for weight loss and sleep apnea. Meanwhile, Donanemab5 has shown promise in slowing cognitive decline for Alzheimer's patients.
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Dividends and buybacks: Eli Lilly consistently increased its quarterly dividend over the years, offering an annual entry point of $5.20 per share6 at the time of writing. As a bonus, the executives at Eli Lilly frequently repurchase billions7 worth of shares.
Cons
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Regulatory risks: Hurdles such as lengthy drug approvals, pricing regulations, and patent laws come with the territory when investing in pharma companies. Besides these costly legal complexities, companies like Eli Lilly may face increased scrutiny for drug safety and marketing, which could lead to investigations or penalties.
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Competitive pressures: Eli Lilly has plenty of competitors who are constantly developing rival treatments. Even with massive R&D investments, there's no knowing how Eli Lilly's drugs work against the competition.
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Premium valuation: As a top-tier pharmaceutical company, Eli Lilly's stock often trades at a premium valuation compared to its peers and market indexes. While Eli Lilly's pipeline and recent successes may justify the high price tag, it could limit potential upside compared to other companies.
FAQs
Eric Esposito is a freelance contributor on MoneyWise with an interest in financial markets, investing, and trading. In addition to MoneyWise, Eric’s work can be found on financial publications such as WallStreetZen and CoinDesk. When not researching the latest stock market trends, Eric enjoys biking, walking his dog, and spending time with family in Central Florida. Eric holds a BA in English from Quinnipiac University.
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