Eli Lilly surpasses Johnson & Johnson with a $445 billion market cap

Some interesting stuff going on with pharmaceutical giant Eli Lilly this week surpassing Dividend Aristocrat Johnson & Johnson (JNJ) as the biggest player in the sector based on market cap. 

Eli Lilly (ticker LLY) is now worth $445 billion versus $430 billion for JNJ. Even more interesting is the dividend of these two giants, with Eli Lilly's dividend growing much faster in the last five years.

Many smart dividend investors know that the stock price eventually follows the dividend, so higher dividend growth most of the time also equals a better stock price performance over time. When looking at Johnson & Johnson vs. Eli Lilly this is just the perfect example. Lilly has been on a tear the last couple of years, not only with its dividend, but also with the stock price. This results in this blog post Today with LLY surpassing JNJ's market cap. 

JNJ has been massively outperformed by LLY

Eli Lilly has a 1103% total return in the last 10 years vs. Johnson & Johnson' 152.8% total return (see chart above). Also Eli Lilly's dividend growth was much better in the last five years with LLY lagging in dividend for a long time before dividend growth picked up with 15% hikes since 2018, beating JNJ with an average 6% hike based on the last five years.

DIVIDEND HIKES JOHNSON & JOHNSON SINCE 2018

• 2023: +5.3%
• 2022: +6.6%
• 2021: +5.0%
• 2020: +6.3%
• 2019: +5.6%
• 2018: +7.1%

DIVIDEND HIKES ELI LILLY SINCE 2018

• 2023: TBA (expected December 2023)
• 2022: +15.3%
• 2021: +15.3%
• 2020: +14.9%
• 2019: +14.7%
• 2018: +14.7%

The lagging dividend growth for Johnson & Johnson compares to the lagging stock price, especially in the last five years with Eli Lilly recently getting a huge lift from its diabetes drugs that can be used for obesity, giving the company a huge potential market. Europe's Novo Nordisk also is one of the big winners, competing with LLY for the obesity market with a simular diabetes based drug that can help people lose weight.

So Eli Lilly has been doing a lot better than JNJ, but also is the more expensive stock based on P/E with a much lower dividend yield. This is partially the result of the stock price going higher and touching a new all time high last week. JNJ is yielding much higher and has a better track record being a Dividend Aristocrat with now 61 consecutive years of dividend growth vs. 9 years for Eli Lilly.