Healthcare stocks compared: Eli Lilly, UnitedHealth and Pfizer

"Healthcare" is one of the broadest labels in the market. It covers companies that invent medicines, companies that make them, and companies that pay for them. The three we cover show how little those businesses have in common: Eli Lilly is a drugmaker in the middle of an enormous growth cycle, Pfizer is a drugmaker coming down from one, and UnitedHealth is mostly an insurer, whose economics look nothing like either. All figures are trailing twelve months to each company's latest quarterly filing — 30 June 2026 for Lilly and UnitedHealth, 28 June 2026 for Pfizer — with valuations at the 14 October 2026 close.

The numbers side by side

The market values them in a different order from their sales: Lilly at $1,137.9bn, UnitedHealth at $355.1bn and Pfizer at $166.5bn. UnitedHealth takes in more than three times as much revenue as the two drugmakers combined, yet it is worth less than a third of Lilly. The gap suggests investors pay for margins and growth, not for size.

Eli Lilly: a growth cycle at full speed

Lilly's revenue grew 31.69% a year from 2022 to 2025, and its earnings per share 49.27% a year, driven above all by its diabetes and obesity treatments, Mounjaro and Zepbound. Growth like that is rare for any company worth over a trillion dollars; in pharmaceuticals it has usually taken a single breakout product, as Pfizer's pandemic years showed.

The margins explain why investors are willing to pay so much. Of each dollar of sales, Lilly keeps 83.4 cents after the cost of making the product, 43.29 cents after research, marketing and administration, and 33.53 cents as net profit. A medicine under patent can be priced on what it does for patients rather than on what it costs to manufacture, and Lilly's figures show that pricing power at work.

The valuation assumes it continues: 40.58 times earnings and 14.28 times sales, an enterprise value of 32.35 times EBITDA, and a free cash flow yield of just 1.6%. Its PEG ratio — P/E divided by the three-year growth rate of earnings per share — is 0.82, a reminder that a high multiple can still be modest relative to growth, as long as that growth lasts.

One figure needs care. Lilly's return on equity is 102.44%, which says more about the small size of its equity base than about the business. Return on invested capital, at 34.35%, counts debt as well as equity and is the better measure here; our guide to ROE versus ROIC explains the difference. The balance sheet itself is comfortable: net debt — $54.91bn of borrowing less $8.95bn of cash — is 1.26 times EBITDA, and operating profit covers interest 38.54 times.

Pfizer: the other side of the cycle

Pfizer shows what happens after the peak. Its three-year growth window starts in 2022, the year its COVID-19 vaccine and treatment sales were at their height, so revenue has since shrunk 14.8% a year and earnings per share 37.12% a year. Those are the steepest declines of any company in this study, and they come mainly from one product family falling away rather than from the rest of the business collapsing.

Pfizer still makes its medicines profitably: a gross margin of 73.18% is high by the standards of any industry. But the operating margin is 10.85% and the net margin 6.8%, so research, selling costs and other charges absorb most of what manufacturing earns. That is why its P/E of 38.43 does not mean investors expect fast growth. It means earnings are depressed — the "depressed earnings" trap described in our P/E guide, where the multiple is high because the "E" shrank.

Two numbers decide how Pfizer's dividend looks. The yield is 5.89%, the highest here, but the payout ratio is 225.77%: the dividend of $1.72 a share is more than twice earnings per share of $0.76. Earnings do not cover it; cash flow currently does, because the free cash flow yield of 6.6% is above the dividend yield. Pfizer bought back no shares over the year. Its balance sheet is the most stretched of the three, partly from the debt it took on to buy the cancer-drug maker Seagen in 2023: net debt — $63.19bn of borrowing less $0.98bn of cash, a figure that leaves out its much larger short-term investments — is 4.61 times EBITDA, and operating profit covers interest only 2.56 times. For how to judge that kind of payout, see dividends versus buybacks.

UnitedHealth: a healthcare company that runs like an insurer

UnitedHealth runs the UnitedHealthcare insurance plans and Optum, a health-services, pharmacy and data business. Its revenue of $450.13bn comes largely from premiums, and most of each premium dollar goes straight back out as payments for patients' care. That is why an insurer's margins are thin by design — it makes money on enormous volume at a narrow spread — and why UnitedHealth's operating margin of 4.82% and net margin of 3.14% cannot be compared with a drugmaker's.

The same fact explains a blank in our data. We print no gross margin for UnitedHealth, because the product-cost line in its filings leaves out the medical claims that are the bulk of its costs, and a figure computed from it would make the company look like a high-margin manufacturer. Our page on the numbers we refuse to print sets out the rule. In practice, the ratios that work for an insurer are the simple ones: the P/E, price-to-book, net margin, return on equity and the dividend.

On those, UnitedHealth's three-year record is uneven. Revenue grew 11.35% a year while earnings per share fell 14.52% a year: the company grew larger while earning less on each share. It has the lowest P/E of the three, at 25.43, though shrinking earnings lift even that; it trades at 0.79 times sales, low by design for an insurer, and 3.4 times book value, with a return on equity of 13.78%. Its free cash flow yield of 6.65% is the highest in the group, and the dividend of $8.95 a share yields 2.26%.

How the head-to-heads come out

Our six-factor scores reflect three very different matchups.

• Lilly vs Pfizer, 3.5 to 2.5. Lilly wins growth, quality and the balance sheet; Pfizer wins valuation and income. Momentum is not scored, as on every page. See Eli Lilly vs Pfizer.
• Lilly vs UnitedHealth, 3 to 3. Lilly wins growth and the balance sheet; UnitedHealth wins valuation and income. Quality is not scored, because UnitedHealth has no gross margin in our data — not because the two businesses are equally good. See Eli Lilly vs UnitedHealth.
• UnitedHealth vs Pfizer, 4 to 2. UnitedHealth wins valuation, growth and the balance sheet; Pfizer wins income on its higher dividend yield. Quality is again not scored. See UnitedHealth vs Pfizer.

Read those scores as a summary of the figures, not as a ranking of the businesses. A factor left unscored adds half a point to each side, which pulls every pairing that includes UnitedHealth towards a draw. Our six-factor score explained sets out every rule behind them.

What the numbers cannot show

Trailing figures miss the forces that move healthcare companies most. A drugmaker's future depends on patents and pipelines: every medicine eventually loses exclusivity, and the products that will replace today's sales do not appear in today's accounts. Lilly's growth is concentrated in one class of treatment, which makes it powerful and exposed at the same time. Government policy matters to all three — the US Medicare programme now negotiates the prices of some drugs, and it sets the rates it pays private insurers for Medicare Advantage plans. None of that shows in a margin or a growth rate, which is exactly why these figures are a starting point rather than a verdict. For how margins compare across very different business models, see operating margin by business model.