Adam Parker of Trivariate Research Recommends Eli Lilly’s Dividend as a Defensive Play

Eli Lilly and Company (NYSE:LLY) is one of Best Dividend Stocks to Buy for Dependable Dividend Growth.

According to Adam Parker, founder of Trivariate Research, investors aiming for a defensive approach might want to look at select dividend-paying stocks. In a note dated June 8, Parker mentioned that while many institutional investors still expect the S&P to climb higher, there’s also growing interest in identifying solid defensive options.

An array of pharmaceutical pills with the company’s logo on the bottle.

He noted that the “old school” strategy of leaning on traditional defensive sectors like consumer staples, pharmaceuticals, and telecoms appears to be “broken.” In response, Trivariate has outlined alternative strategies for defensive positioning, one of which includes focusing on dividend-paying equities. Parker made the following comment:

“We think companies with consistent dividend growth are likely to provide strong defense if there’s a growth scare. Specifically, our past work shows that companies that have grown their dividend over the last five years and that are indicated to have continued dividend growth, as well as at least 7% forecasted sales growth and 10% forecasted earnings growth outperform.”

Eli Lilly and Company (NYSE:LLY) was the only pharmaceutical company to make the list. The firm offers a dividend yield of 0.76% and has seen its stock has surged by nearly 2% year-to-date. In May, the company posted better-than-expected earnings and revenue for the first quarter but trimmed its full-year profit outlook due to costs tied to a cancer drug deal. However, it kept its full-year sales forecast unchanged.

Following the earnings release, CEO Dave Ricks told CNBC that the potential market for its widely used weight-loss and diabetes medications is “massive.” Eli Lilly and Company (NYSE:LLY)’s diabetes drug is Mounjaro, while Zepbound is its treatment for obesity. Ricks made the following statement in an interview with ” Squawk Box ” on May 1:

“Today we probably have about 10 million Americans taking GLP-1s. The market opportunity is much, much larger than that. We see this as a big wave of innovation for many years to come and Lilly is at the forefront of that.”

According to FactSet, Eli Lilly and Company (NYSE:LLY) holds an average rating of “Overweight,” with analysts projecting nearly 21% upside based on the stock’s average price target.

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