Lilly announces new $15 billion share repurchase program and seventh consecutive 15% dividend increase

Rhea-AI Summary

Eli Lilly has announced a new $15 billion share repurchase program, following the completion of its previous $5 billion program in Q4 2024. The company's board of directors has also approved a 15% increase in quarterly dividend to $1.50 per share, marking the seventh consecutive year of such increases.

The dividend will be payable on March 10, 2025, to shareholders of record as of February 14, 2025. The company plans to execute the share repurchase program over three years through various methods, including open market purchases and accelerated share repurchases, while maintaining focus on supporting new launches, expanding manufacturing capacity, and advancing pipeline development.

Positive

• New $15 billion share repurchase program announced
• 15% increase in quarterly dividend to $1.50 per share
• Seventh consecutive year of 15% dividend increases
• Successfully completed previous $5 billion share repurchase program
• Company entering period of rapid growth

Negative

• None.

Insights

Financial Analyst

This substantial $15 billion share repurchase program, coupled with a 15% dividend increase, signals exceptional financial strength and management's high confidence in Lilly's growth trajectory. The dividend hike marks the seventh consecutive year of 15% increases, demonstrating remarkable consistency in shareholder returns. The three-year timeframe for the buyback provides flexibility while maintaining a disciplined approach to capital deployment. Most notably, Lilly's commitment to prioritizing operational investments in launches, manufacturing expansion and R&D alongside these shareholder returns indicates a well-balanced capital allocation strategy. The recent completion of their previous $5 billion program and immediate authorization of a larger one reflects the company's robust cash flow generation and optimistic outlook for their commercial pipeline, particularly in diabetes and obesity treatments.

Market Research Analyst

The timing and scale of this capital return program is strategically significant given Lilly's current market position. With a market cap exceeding $750 billion, this buyback represents roughly 2% of shares outstanding. The flexibility in execution methods, including open market purchases and accelerated repurchases, allows management to opportunistically acquire shares while maintaining market stability. The dividend increase to $1.50 per share quarterly reinforces Lilly's position as a premium growth and income stock. This comprehensive shareholder return package, announced during a period of rapid growth, particularly stands out as it doesn't come at the expense of core business investments. This balanced approach should resonate strongly with both growth and value investors, potentially supporting continued multiple expansion.

INDIANAPOLIS, Dec. 9, 2024 /PRNewswire/ -- Today, the board of directors of Eli Lilly and Company (NYSE: LLY) approved a new $15 billion share repurchase program. The company's prior $5 billion share repurchase program was completed in the fourth quarter of 2024.  

Additionally, for the seventh consecutive year, the board has announced a 15% increase in its quarterly dividend and declared a dividend for the first quarter of 2025 of $1.50 per share. The dividend is payable on March 10, 2025, to shareholders of record at the close of business on February 14, 2025.

"As Lilly has entered into a period of rapid growth, our capital allocation priorities remain the same. We will continue to focus on supporting new launches, expanding our manufacturing capacity, and advancing our pipeline through research and development and business development," said Lucas Montarce, Lilly executive vice president and chief financial officer. "However, given the strong growth profile of the company, we're also increasing the amount of capital we plan to return to shareholders. We expect to execute this program over the next three years."

Purchases may be made from time to time at management's discretion. The share repurchase program permits shares to be repurchased in a variety of methods, including open market purchases, accelerated share repurchases, or other privately negotiated transactions. The share repurchase program has no time limit and may be suspended or discontinued at any time.

About Lilly
Lilly is a medicine company turning science into healing to make life better for people around the world. We've been pioneering life-changing discoveries for nearly 150 years, and today our medicines help tens of millions of people across the globe. Harnessing the power of biotechnology, chemistry and genetic medicine, our scientists are urgently advancing new discoveries to solve some of the world's most significant health challenges: redefining diabetes care; treating obesity and curtailing its most devastating long-term effects; advancing the fight against Alzheimer's disease; providing solutions to some of the most debilitating immune system disorders; and transforming the most difficult-to-treat cancers into manageable diseases. With each step toward a healthier world, we're motivated by one thing: making life better for millions more people. That includes delivering innovative clinical trials that reflect the diversity of our world and working to ensure our medicines are accessible and affordable. To learn more, visit Lilly.com and Lilly.com/news, or follow us on Facebook, Instagram, and LinkedIn. F-LLY  

Lilly Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) related to expected dividend payments and potential share repurchases and reflects Lilly's current beliefs and expectations. However, there are significant risks and uncertainties in pharmaceutical research and development, as well as in business development activities and capital allocation strategies related to the company's business and actual results may differ materially due to various factors.  For a further discussion of these and other risks and uncertainties that could cause actual results to differ from Lilly's expectations, please see Lilly's most recent Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. Lilly undertakes no duty to update forward-looking statements.

Refer to:	Carrie Munk; munk_carrie@lilly.com; 317-416-2393 (Media)
	Michael Czapar; czapar_michael_c@lilly.com; 317-617-0983 (Investors)

 

 

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SOURCE Eli Lilly and Company

FAQ

What is the size of Eli Lilly's (LLY) new share repurchase program?

Eli Lilly (LLY) announced a new $15 billion share repurchase program in December 2024.

How much did Eli Lilly (LLY) increase its quarterly dividend in 2024?

Eli Lilly (LLY) increased its quarterly dividend by 15% to $1.50 per share, marking the seventh consecutive year of 15% increases.

When will Eli Lilly's (LLY) new quarterly dividend be paid?

The new quarterly dividend will be paid on March 10, 2025, to shareholders of record as of February 14, 2025.

How long will it take Eli Lilly (LLY) to execute the new share repurchase program?

Eli Lilly expects to execute the $15 billion share repurchase program over the next three years.