If you had put $1,000 into Eli Lilly stock 20 years ago, you’d be surprised at how much it has grown. The giant pharmaceutical firm has experienced incredible growth over the years, rewarding those who were patient. But how much would your investment be today? And what can you learn from Eli Lilly’s success? Let’s examine it more closely.
How much would $1,000 invested in Eli Lilly 20 years ago be worth today?
If you had invested $1,000 in Eli Lilly (NYSE: LLY) two decades ago, your money would have grown into a much larger sum today. Following the yearly average return of 11.65%, your investment would have grown to $9,022.02 now that the latest stock price is $557.11.
That would have made your initial investment over nine times bigger over the years. Such is the power of long-term investing and compounding returns.
Has Eli Lilly outperformed the stock market?
Indeed, Eli Lilly has outgrown the associated stock market share for the past 20 years. The S&P 500 gives an average annual return rate of around 7.66% per annum, while Eli Lilly gave an annual return of 11.65% per annum. The average seems not too different at this instance, but in time, every point counts extremely well. An insight into the returns of Eli Lilly shares compared to the S&P 500 reveals the following:
- Eli Lilly (LLY) at 11.65% average annual return.
- S&P 500 at 7.66% average annual return.
This contrast in performance gives a higher return for those who owned Eli Lilly shares for many years.
Why has Eli Lilly stock performed so well?
Eli Lilly has been a strong performer due to several factors:
- Innovation in medicine – The company has developed blockbuster drugs, especially in areas like diabetes and cancer treatments.
- Consistent revenue growth – Strong demand for its products has led to steady revenue and profit increases.
- Pipeline of new drugs – Investors have remained optimistic about future treatments in development.
- Dividend payments – Eli Lilly has rewarded shareholders with dividends, further boosting returns.
These factors have made it a favorite among long-term investors who believe in the company’s future growth.
Is Eli Lilly a good investment today?
While past performance does not guarantee future results, Eli Lilly continues to be a strong company with solid growth prospects. However, its stock price has risen significantly in recent years, making it more expensive than before.
Before investing, consider these factors:
- Current valuation – Is the stock fairly priced, or is it overvalued?
- Industry trends – How is the pharmaceutical sector evolving?
- Competition – Are there other companies with stronger growth potential?
Investing always carries risks, so it is essential to do your research before making any decisions.
What can investors learn from Eli Lilly’s growth?
The lesson you can learn from Eli Lily’s success is the power of long term investment. If you had invested for a short term you obviously missed out on the significant gains now available in the market. However, if you are among those that held on to their share at least for two decades then your money must have grown to nearly ninefold now.
Here are the things you need to take note of as an investor:
- Patience pays off – The biggest rewards come to those who stay invested.
- Compounding is powerful – Even small annual gains add up over time.
- Quality companies grow over time – Strong businesses tend to deliver solid returns in the long run.
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