Eli Lilly vs. Novo Nordisk: One Has 39% Upside. I'm Picking the Other.

Eli Lilly vs. Novo Nordisk: One Has 39% Upside. I'm Picking the Other.

Rick Orford Tue, September 8, 2026 at 1:00 AM GMT+2 5 min read LLY NVO A concept image of a woman placing a psychedelic pill in her open mouth by BLACKDAY via Shutterstock_com Obesity is becoming one of healthcare's biggest long-term challenges, and treating it is creating one of the pharmaceutical industry's biggest opportunities. For many patients, managing weight goes beyond diet and exercise. Obesity is a chronic disease, and as treatment options improve, medicines are becoming an increasingly important part of how it is managed.

That puts  Eli Lilly (LLY) and  Novo Nordisk (NVO) in an interesting position. Both have built major businesses around diabetes and obesity, and both are pushing to stay ahead as demand for these treatments grows. More News from Barchart Altria Is Spending More on Capex Than Any Other Consumer Staples Name.

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Sign up now! For dividend investors, however, the decision goes beyond which drug is better. Lilly offers stronger growth, while Novo offers a cheaper valuation and a higher dividend yield.

That makes this matchup particularly interesting. So which one offers the better balance of growth, value, and income today? Eli Lilly and Company Screenshot courtesy of www.

barchart. com Eli Lilly and Company  is a long-established pharmaceutical company best known for developing diabetes treatments. What many miss is that its portfolio covers a broader range of serious and chronic conditions, giving Lilly a diversified business.

It is the Goliath in this comparison, with a market cap of nearly $1. 1 trillion. Novo Nordisk A/S ADR Screenshot courtesy of www.

barchart. com Novo Nordisk A/S is a Danish pharmaceutical company with a century-long history in diabetes care. Much like Lilly, Novo has diabetes at the heart of its business, although it has also expanded into obesity and other chronic diseases.

In terms of size, Novo is clearly the smaller challenger, with a market cap of about $201 billion. That size difference is hard to ignore, but it does not tell the whole story. In obesity, these two companies are fighting for many of the same patients, putting them on much more even ground than their market caps suggest.

The Race for the Next Big Obesity Treatment Lilly and Novo Nordisk compete across several areas of medicine, but obesity is what makes this matchup particularly interesting. Both companies already have major treatments on the market, and neither appears willing to give up ground. Lilly has Zepbound (Tirzepatide), while Novo Nordisk has Wegovy, putting the two companies head-to-head in the weight-loss market.

But the rivalry is now moving into the realm of pills. Novo launched the Wegovy pill in the U. S.

in January, and it surpassed 3 million prescriptions in its first five months, indicating strong early demand. Story Continues But Lilly was not far behind. Foundayo, its once-daily obesity pill, received FDA approval in April and is already available in the U.

S. Unlike the Wegovy pill, Lilly says Foundayo can be taken without food or water restrictions, adding another layer to the competition. And the race does not stop with pills.

Lilly is developing retatrutide, which produced strong weight-loss results in late-stage trials and is expected to be submitted for U. S. approval in early 2027.

Novo, meanwhile, is developing CagriSema. The drug achieved 23% weight loss in a head-to-head study, but it did not demonstrate that it was at least as effective as Lilly's tirzepatide. In a nutshell, Novo has a strong position in the obesity market today, but Lilly is attacking the market from several angles.

Still, promising treatments only tell part of the story. To see who has the lead today, we need to look at the numbers. LLY vs.

NVO: What the Numbers Say So here are the latest annual metrics for these two contenders, seen on Barchart's Stock Comparison Tool. Screenshot courtesy of www. barchart.

com Immediately, we can see that Eli Lilly has higher sales and net income numbers. But let's put this in context. LLY is trading at 5.

5x NVO's market cap. And yet, the bigger company's revenue is only 39. 3% higher.

It's almost the same story with net income, with Eli Lilly pulling ahead by 33. 1%. And that trade-off shows up in the valuation.

Lilly trades at nearly 32x forward earnings, more than twice Novo Nordisk's 13x multiple. A higher P/E means investors are paying more for expected growth, making the company with the higher ratio have more to prove. For comparison, the S&P 500 Health Care sector trades at around 30.

47x earnings, which means LLY is trading slightly above the sector average, while NVO looks extremely cheap by comparison. But if we look at bottom-line growth, we can see why Eli Lilly is trading where it is. Compared to the previous year, its earnings per share (EPS) has improved by 33%, while Novo Nordisk reported a 1% contraction.

Dividend Comparison So Lilly leads in growth, while Novo has the cheaper valuation. But for income-focused investors, here's what matters most. Eli Lilly pays a forward annual dividend of $6.

92, which translates to a yield of around 0. 6%, while Novo Nordisk pays $0. 82 annually, translating to a yield of approximately 1.

8% For some investors, that higher yield could be enough to tip the scales toward Novo. But income is only part of the return equation. Let's see which stock offers more potential upside from here.

Wall Street Opinion and Upside for LLY and NVO A consensus among 29 analysts rates LLY stock a "Strong Buy," with decent upside potential of up to 39% over the next year. Screenshot courtesy of www. barchart.

com Meanwhile, NVO stock is rated "Hold" according to a consensus among 23 analysts, with modest upside potential of 18% over the next year Screenshot courtesy of www. barchart. com Verdict Healthcare is one of the few sectors where demand is unlikely to disappear.

Chronic conditions such as diabetes and obesity still need treatment, which gives both Lilly and Novo Nordisk a durable long-term market. If I had to pick one today, I would choose Novo Nordisk. Lilly has stronger growth, but Novo is much cheaper and offers a better dividend yield.

Its Hold rating also suggests expectations are more restrained, which could give patient investors a better entry point if the stock remains under pressure. On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.

This article was originally published on Barchart.