Should You Forget Eli Lilly and Buy This Magnificent High-Yield Dividend Stock Instead?

By Reuben Gregg Brewer – Mar 1, 2026 at 5:45AM ESTKey PointsEli Lilly is the current leader in the GLP-1 weight-loss drug space.Investors have placed a high valuation on Lilly's stock.Pfizer could be a more attractive option for long-term investors who love dividends.Eli Lilly (LLY +2.76%) is growing very quickly right now thanks to Mounjaro and Zepbound, its two GLP-1 drugs, the latter of which is approved for weight loss. Mounjaro's sales rose 99% in 2025, and Zepbound's sales were up a shocking 175%. But these two drugs accounted for almost all of Lilly's top-line growth last year. That's a problem in the making -- and why you might want to consider an out-of-favor alternative like high-yielding Pfizer (PFE +1.94%). Image source: Getty Images. Eli Lilly is priced for perfection It's great news that Eli Lilly is leading the pack in the newly developed GLP-1 drug niche. However, the company has very quickly become a one-trick pony. As noted, Mounjaro (used to treat diabetes) and Zepbound are the company's primary growth drivers right now. And those two drugs accounted for 56% of the top line in 2025, which is a bit troubling. Given the nature of the drug space, Mounjaro and Zepbound will eventually face generic competition. When that happens, their revenue and profits will materially decline. There's time before that happens, but don't count out Lilly's competitors. Many of its peers are looking for GLP-1 drugs that can unseat their dominant rival. ExpandNYSE: LLYEli LillyToday's Change(2.76%) $28.18Current Price$1050.20Key Data PointsMarket Cap$992BDay's Range$1015.39 - $1052.0052wk Range$623.78 - $1133.95Volume177KAvg Vol3.2MGross Margin83.04%Dividend Yield0.59% Meanwhile, Wall Street has bid Eli Lilly's shares up to the point where the price-to-earnings (P/E) ratio is a lofty 45, and the dividend yield is a paltry 0.6%. If the company's GLP-1 dominance falls short of perfection, there could be material downside risk. Pfizer might be a better option for you Pfizer's internally developed GLP-1 drug failed to work out. Drug failures aren't uncommon in the pharmaceutical sector. But that misstep, coupled with upcoming patent expirations, has investors deeply worried about Pfizer's future. On the other hand, the company recently stated that it plans to support the dividend at its current level as it works through its headwinds. The stock currently offers a lofty 6.3% yield, and (compared to Lilly) has a far more reasonable P/E ratio of around 20. ExpandNYSE: PFEPfizerToday's Change(1.94%) $0.53Current Price$27.63Key Data PointsMarket Cap$157BDay's Range$27.09 - $27.6652wk Range$20.91 - $27.94Volume1.2MAvg Vol48MGross Margin66.23%Dividend Yield6.22% That said, the real reason to buy Pfizer is what happened after its GLP-1 drug setback. The company quickly acquired a biotech with a promising GLP-1 drug candidate, and then inked a distribution partnership with another pharma company developing a GLP-1 pill. Essentially, Pfizer is proving it has the wherewithal to survive and thrive over the long term. Given that and the statement made in support of the dividend, long-term income investors should probably take the time to research this unloved pharma stock today. If history is any guide, Pfizer will eventually get back into Wall Street's good graces.Read NextFeb 26, 2026 •By Brett SchaferWhy Shares of Novo Nordisk Stock Sank (Again) This WeekFeb 25, 2026 •By Adria CiminoEli Lilly Just Took 2 Major Steps Forward in the Billion-Dollar Obesity Drug Market. Here's What You Need to Know.Feb 24, 2026 •By Eric VolkmanWhy Eli Lilly Stock Slumped TodayFeb 23, 2026 •By Rich SmithWhy Eli Lilly Stock Just PoppedFeb 23, 2026 •By Prosper Junior BakinyEli Lilly: The Weight‑Loss and Diabetes Powerhouse I'd Hold Through Any Market CrashFeb 19, 2026 •By Reuben Gregg BrewerWarning: This Skyrocketing Stock Has a Hidden RiskAbout the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerStocks MentionedEli LillyNYSE: LLY$1,051.99(+2.93%)+$29.97PfizerNYSE: PFE$27.65(+2.03%)+$0.55*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.