Apple Inc. (AAPL)vs Eli Lilly and Company (LLY)

Quick verdict

Apple (AAPL) and Eli Lilly (LLY) operate in different sectors but both trade at premium valuations. AAPL's trailing P/E of 40.26 sits above LLY's 11.81, though on a forward basis the two converge somewhat at 26.84 versus 25.73, suggesting the market expects LLY's near-term earnings to normalise upward. The overall scores of 4.5 (AAPL) versus 1.5 (LLY) reflect AAPL's leadership across quality, balance sheet, income and momentum verdicts, all graded A, while growth is scored a tie between the two. AAPL is tagged high-quality with a beta of 1.097, while LLY is tagged high-volatility with a beta of 1.61 and a much larger 52-week range (257.90 to 670.53) versus AAPL's (145.01 to 222.23). Both firms show robust historical growth, but profitability, leverage and recent share price trends diverge, as detailed in the sections that follow.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Apple is a Technology sector company in the Consumer Electronics industry, designing and selling a diverse suite of electronic devices and associated services globally. Eli Lilly operates in Healthcare as a Drug Manufacturer, developing and commercialising pharmaceutical products. The two businesses are not close competitors but are frequently compared as large-cap holdings. Apple's market capitalisation of approximately $4.90 trillion dwarfs Eli Lilly's $36.46 billion figure in this dataset, reflecting the scale difference between a diversified hardware/services ecosystem and a specialised pharmaceutical manufacturer. Average trading volumes are broadly similar in share terms, with AAPL at 54.83 million shares and LLY at 35.45 million shares daily, though this translates to very different dollar turnover given the price and market cap disparity between the two names.

Valuation

On trailing earnings, LLY appears cheaper with a P/E of 11.81 against AAPL's 40.26, though this gap narrows sharply on a forward basis, 25.73 versus 26.84, indicating the market anticipates a shift in LLY's earnings base. Price-to-sales tells a similar story, with LLY at 5.29 versus AAPL's 10.86. However, price-to-book strongly favours LLY at 15.34 against AAPL's elevated 46.1. EV/EBITDA sits at 18.53 for LLY versus 30.87 for AAPL, and free cash flow yields are close, 3.41% (LLY) versus 3.57% (AAPL). The PEG ratio, which adjusts for growth, is lower for LLY at 1.05 versus AAPL's 1.39. The overall valuation verdict is graded B, and LLY is named best for value-oriented considerations among the bestFor tags.

Growth profile

Growth is scored a tie between the two companies. Apple shows a 3-year revenue CAGR of 6.43% but a notably stronger 5-year revenue CAGR of 29.32%, alongside EPS CAGRs of 22.59% (3-year) and 39.1% (5-year). Eli Lilly shows more consistent growth rates across both horizons, with revenue CAGRs of 13.72% (3-year) and 15.23% (5-year), and EPS CAGRs of 16.05% (3-year) and 15.37% (5-year). While AAPL's 5-year figures are higher in absolute terms, LLY's growth profile is steadier across the two time frames, which may explain the tie verdict despite differing headline numbers. Eli Lilly is also flagged as best for growth in the bestFor summary, despite the tie score, pointing to its more consistent trajectory.

Profitability and quality

Apple demonstrates stronger overall margin and return metrics, with gross margin of 47.86%, operating margin of 32.64%, and net margin of 27.15%, compared to Lilly's 42.56%, 12.15%, and 35.79% respectively. Notably, LLY's net margin exceeds AAPL's despite a much lower operating margin, pointing to differences below the operating line. Return metrics favour Apple decisively: ROE of 146.69% and ROIC of 49.57% versus Lilly's ROE of 34.62% and ROIC of 7.86%. The quality verdict is graded A, consistent with Apple's markedly higher capital efficiency figures, though Lilly is also named best for quality in the bestFor tags alongside its income designation, indicating strengths in this comparison are not exclusively one-sided.

Balance-sheet risk

Apple holds cash of approximately $67.92 billion against total debt of $76.23 billion, producing a net debt/EBITDA ratio of -1.5, indicating a net cash position relative to earnings. Its current ratio stands at 1.07 and interest coverage at 3.19. Eli Lilly holds a smaller cash balance of $3.73 billion against total debt of $52.95 billion, with net debt/EBITDA of 1.15, a current ratio of 2.81, and notably higher interest coverage of 14.96. The balance sheet verdict is graded A. While AAPL benefits from a net cash position, LLY's higher current ratio and stronger interest coverage suggest more comfortable short-term liquidity and debt-servicing capacity despite carrying net debt.

Price performance and shareholder returns

Apple has delivered stronger recent share price performance, with a year-to-date return of 58.09% and a 1-year return of 73.53%, compared to Lilly's 28.15% and 16.53% respectively. Over 3 years annualised, AAPL returns 27.16% versus LLY's 0.62%. Over 5 years annualised, however, both are negative or negligible, AAPL at -0.6% and LLY at 6.49%, with LLY actually ahead on this longer horizon. Maximum drawdown over 5 years was deeper for LLY at -39.56% versus AAPL's -19.47%, consistent with LLY's higher beta of 1.61 against AAPL's 1.097. The momentum verdict favours AAPL with a grade of A, reflecting its stronger short and medium-term returns despite LLY's edge on the longest measured horizon.

Which stock fits which investor

Based solely on the supplied verdicts, AAPL carries an overall score of 4.5 versus LLY's 1.5, with AAPL graded A across quality, balance sheet, income and momentum, and B on valuation, while growth is tied. AAPL is tagged high-quality and may suit investors prioritising profitability metrics such as ROE of 146.69% and ROIC of 49.57%, alongside stronger recent momentum. LLY is tagged high-volatility, reflected in its beta of 1.61 and wider 52-week range, but is named best for value and growth considerations in the bestFor summary, alongside AAPL being named best for income and quality. Neither this section nor any other constitutes investment advice; the data simply indicates differing risk and metric profiles between the two names.

• Value: LLY
• Growth: LLY
• Income: AAPL
• Quality: AAPL

Frequently asked questions

Which company has the higher overall score, AAPL or LLY?

Apple has the higher overall score at 4.5 compared to Eli Lilly's 1.5, based on the supplied verdicts covering valuation, growth, quality, balance sheet, income and momentum.

Is AAPL or LLY considered better value?

The bestFor data names LLY as best for value, supported by a lower trailing P/E of 11.81 versus AAPL's 40.26 and a lower PEG ratio of 1.05 versus 1.39, though the overall valuation verdict for the comparison is graded B.

Which stock has shown stronger recent performance?

AAPL has stronger recent returns, with a 1-year return of 73.53% and year-to-date return of 58.09%, compared to LLY's 16.53% and 28.15% respectively, and holds the momentum verdict of A.

How do the balance sheets of AAPL and LLY compare?

AAPL holds net cash with a net debt/EBITDA of -1.5, while LLY carries net debt with a ratio of 1.15 but shows stronger interest coverage of 14.96 versus AAPL's 3.19 and a higher current ratio of 2.81 versus 1.07. The balance sheet verdict is graded A.

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