Eli Lilly and Company (LLY)vs Pfizer Inc. (PFE)

Quick verdict

At the 4 September 2026 close Eli Lilly carried a market value of $1,082.0bn against Pfizer's $162.2bn — roughly seven times larger — yet the revenue gap is modest, $79.7bn versus $63.7bn in the twelve months to late June 2026. That mismatch is the story here: investors are paying for what Lilly's diabetes and obesity franchise is expected to become, not for its current sales lead. The scorecard splits accordingly. Lilly takes growth, quality and balance sheet, with a three-year revenue CAGR of 31.7% to fiscal 2025 and a 34.4% return on invested capital. Pfizer takes valuation and income on a 2.55x price-to-sales multiple, a 6.77% free cash flow yield and a 6.05% dividend yield. Momentum is judged a tie. Composite scores land at 3.5 for Lilly and 2.5 for Pfizer — a clear but not overwhelming margin.

At-a-glance comparison

Business model and revenue mix

Both are US-listed large-cap drug manufacturers, but their revenue mixes have diverged sharply. Eli Lilly develops and sells prescription medicines led by diabetes and obesity treatments — Mounjaro and Zepbound — alongside oncology, and that concentration shows in an 83.4% gross margin and 43.3% operating margin on $79.7bn of trailing revenue. Pfizer spans vaccines and medicines across oncology, immunology, cardiology and infectious disease, a broader but currently less profitable mix: $63.7bn of revenue converting at a 73.2% gross margin and a 10.9% operating margin. Neither company reports a separate operating-income line, so operating profit for both is measured before interest and tax — $34.5bn at Lilly, $6.9bn at Pfizer. Share counts underline the structural difference: Lilly has 941 million shares outstanding priced at $1,149.36, Pfizer 5.70 billion at $28.45.

Valuation

On the multiples our data holds, Pfizer is the cheaper share and takes this factor. Its 2.55x price-to-sales and 1.90x price-to-book sit far beneath Lilly's 13.58x and 31.94x, and on enterprise value to EBITDA the gap is 16.6x against 30.8x. Free cash flow yield tells the same story — 6.77% at Pfizer versus 1.68% at Lilly, all measured at the 4 September 2026 price. The one place they nearly converge is trailing P/E: 37.4x for Pfizer against 38.6x for Lilly, but that reflects Pfizer's compressed $4.3bn of trailing net income rather than any similarity in expectations. Lilly's PEG of 0.78 puts its earnings multiple against a 49.3% three-year EPS growth rate; no PEG is available for Pfizer, whose three-year EPS CAGR is negative.

Growth profile

Growth is the widest gap on the page and goes decisively to Lilly. Revenue compounded at 31.7% a year from fiscal 2022 to fiscal 2025 and at 21.6% from fiscal 2020, while earnings per share compounded at 49.3% over three years and 27.6% over five. Pfizer's trajectory runs the other way: revenue declined at 14.8% a year from fiscal 2022 to fiscal 2025, and EPS fell at 37.1% annually over the same span. Stretching to five years softens but does not reverse the picture — revenue growth of 8.48% a year from fiscal 2020, against an EPS decline of 3.56%. The fiscal 2022 base year matters for Pfizer, since it captures the descent from pandemic-era product demand; the five-year figures are the fairer read, and they still trail Lilly's by a wide margin.

Profitability and quality

Quality separates these two as clearly as growth does. Lilly converted $79.7bn of trailing revenue into $34.5bn of operating profit and $26.7bn of net income — a 43.3% operating margin and 33.5% net margin. Pfizer turned a slightly smaller $63.7bn into $6.9bn of operating profit and $4.3bn of net income, giving margins of 10.9% and 6.8%. The gross-margin gap is narrower, 83.4% against 73.2%, which locates the difference below the gross line rather than in pricing. Returns follow: Lilly's 34.4% return on invested capital against Pfizer's 3.7%. One caveat worth naming — Lilly's 102.4% return on equity is flattered by a slim $33.9bn equity base, so ROIC is the more reliable comparison. Notably, Pfizer's $11.0bn of free cash flow exceeds its reported net income by a wide margin.

Balance-sheet risk

Lilly wins here, though neither balance sheet is lightly geared. Total debt stands at $54.9bn for Lilly and $63.2bn for Pfizer, but the cash positions and earnings bases behind them differ sharply. Lilly holds $9.0bn of cash against Pfizer's $1.0bn, and net debt to EBITDA reads 1.26x versus 4.61x. Interest coverage is the starkest contrast: Lilly's operating profit covers interest 38.5 times, Pfizer's just 2.56 times — thin enough to constrain flexibility if earnings soften further. Current ratios are close, 1.35 at Lilly and 1.27 at Pfizer, so short-term liquidity is not the dividing line. Both sets of figures are as at the end of June 2026. Pfizer's $11.0bn of trailing free cash flow gives it a route to deleveraging, but the starting leverage is materially higher.

Price performance and shareholder returns

Income favours Pfizer and the margin is not close. Its 6.05% dividend yield, from $1.72 per share over the trailing twelve months, dwarfs Lilly's 0.58% on $6.69 per share. The catch sits in the payout ratio: Pfizer distributed 225.8% of trailing earnings, more than twice what it earned, which is only sustainable because free cash flow of $11.0bn runs well ahead of $4.3bn of net income. Lilly's 21.7% payout leaves ample headroom and room for growth. On buybacks the positions reverse in kind though not in scale — Lilly returned a 0.57% buyback yield, Pfizer none at all. For total shareholder return, Pfizer offers the higher current cash yield with less cover; Lilly offers a smaller, faster-growing distribution funded from a far wider margin.

Which stock fits which investor

The split is unusually clean. Growth and quality investors are pointed to Lilly: a 31.7% three-year revenue CAGR, 43.3% operating margin, 34.4% ROIC and a PEG of 0.78 describe a business compounding fast enough to argue with its 13.58x sales multiple. Value and income investors are pointed to Pfizer: 1.90x book, 16.6x EV/EBITDA, a 6.77% free cash flow yield and a 6.05% dividend. The style tags fit — high-growth, high-quality against income, mature. What neither camp should ignore is the other side of its own choice. Lilly's buyers accept 31.9x book and a 1.68% cash yield; Pfizer's accept 4.61x net debt to EBITDA, 2.56x interest coverage and three years of falling revenue. Momentum is scored a tie, so the decision rests on which risk suits the mandate.

• Value: PFE
• Growth: LLY
• Income: PFE
• Quality: LLY

Frequently asked questions

Which is the larger company, Lilly or Pfizer?

By market value Lilly is far larger — $1,082.0bn against Pfizer's $162.2bn at the 4 September 2026 close, roughly seven times the size. By revenue the gap is much narrower: $79.7bn versus $63.7bn in the twelve months to late June 2026.

Why do both trade on similar P/E ratios despite very different growth?

Trailing P/E is 38.6x for Lilly and 37.4x for Pfizer, but the denominators differ in character. Lilly earned $26.7bn of net income on a 33.5% net margin; Pfizer earned $4.3bn on a 6.8% margin after a 37.1% annual EPS decline from fiscal 2022 to fiscal 2025.

Is Pfizer's dividend covered?

Not by earnings. The payout ratio is 225.8% of trailing net income of $4.3bn. It is covered by cash flow, however — free cash flow of $11.0bn in the twelve months to June 2026 exceeds the distribution implied by a 6.05% yield on a $162.2bn market cap.

Which has the stronger balance sheet?

Lilly. Net debt to EBITDA is 1.26x against Pfizer's 4.61x, and interest coverage is 38.5 times versus 2.56 times. Lilly also holds $9.0bn of cash to Pfizer's $1.0bn, as at the end of June 2026.

Is Lilly's 102% return on equity as good as it looks?

It should be read with care. The figure rests on a $33.9bn shareholders' equity base, which is small relative to $26.7bn of trailing net income. Return on invested capital of 34.4% is the sturdier measure, and it still comfortably exceeds Pfizer's 3.7%.

Related comparisons

• LLY vs UNH
• UNH vs PFE