UnitedHealth Group Incorporated (NYSE:UNH) and Eli Lilly and Company (NYSE:LLY) both have respectable dividend records, but the two companies are at different stages of their dividend journeys. UNH has the longer history. It has paid dividends since 1990 and has raised its payout for 16 straight years. Its quarterly dividend now stands at $2.32 per share.
Lilly has increased its dividend for 11 consecutive years. While that streak is shorter, the growth has been considerably faster. The company raised its dividend by 15% for seven straight years through 2025, bringing its quarterly payout to $1.73 per share.
UnitedHealth Group Incorporated (NYSE:UNH) clearly has the longer dividend record. Eli Lilly and Company (NYSE:LLY)’s advantage is the pace at which its payout has grown.
Yield and Valuation
The gap is even more noticeable when it comes to yield. UNH offers roughly a 2% dividend yield, while Lilly’s is below 1%. For investors looking for income from their holdings today, UnitedHealth Group Incorporated (NYSE:UNH) has the clear advantage.
The valuation gap is just as wide. UNH trades at roughly 25 times trailing earnings and about 22 times forward earnings, compared with close to 40 times trailing earnings for Eli Lilly and Company (NYSE:LLY). Lilly’s higher valuation is not difficult to understand. Its business is growing much faster, helped in large part by its diabetes and obesity drugs. Still, investors are paying considerably more for each dollar of Lilly’s earnings. UNH, by comparison, looks much more reasonably valued, which is important for investors weighing the stock primarily for its dividend.
Dividend Prospects
Eli Lilly and Company (NYSE:LLY) has the stronger setup for dividend growth over the longer term. Its payout remains small relative to earnings, leaving plenty of room for increases. Much of that potential comes from the underlying business, which continues to grow at a rapid pace. Revenue jumped 45% to $65.2 billion in 2025, while earnings also posted strong growth. If Mounjaro, Zepbound, and the rest of Lilly’s drug pipeline continue to perform well, the company should have the earnings power to keep increasing its dividend at a healthy rate.
The drawback is the starting yield. At less than 1%, Lilly offers little income today. Investors choosing the stock for its dividend are largely counting on that payout becoming much more meaningful over the years ahead.
UnitedHealth Group Incorporated (NYSE:UNH) presents a different picture. It is unlikely to match Eli Lilly and Company (NYSE:LLY)’s dividend-growth rate, but investors start with a much higher yield. UNH raised its dividend to $2.32 per share in 2026, while second-quarter results included $11.1 billion in operating cash flow. The company also raised its 2026 adjusted EPS outlook to $19.50-$20.00 per share.
Those figures provide a reasonable earnings and cash-flow cushion for the dividend. The bigger issue is the pace of future growth. UNH still faces higher medical costs and pressure in its Medicare Advantage business, which could make it harder to increase the payout quickly.
Final Conclusion
At current prices, UnitedHealth Group Incorporated (NYSE:UNH) looks like the better choice for dividend investors. The stock offers more income, a longer record of dividend increases, and a considerably lower valuation. Taken together, those factors make the dividend proposition more balanced. Eli Lilly and Company (NYSE:LLY) is more compelling for investors focused on future dividend growth rather than income today. Continued earnings growth could support double-digit dividend increases for years. The trade-off is the premium valuation and a starting yield of less than 1%.
The choice comes down to what investors want from the dividend. UNH is the better income-and-value play, while LLY is the better dividend-growth play. For a dividend portfolio today, UNH offers the more balanced combination of yield, history, and valuation. Lilly is better suited to investors willing to accept less income now in exchange for the potential of faster dividend growth in the years ahead.
While we acknowledge the risk and potential of UNH and LLY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNH and LLY and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
