Investors looking to tap into some growth in the healthcare industry should look no further than Eli Lilly (NYSE:LLY) and GlaxoSmithKline (NYSE:GSK). Both of these stocks could be excellent buys, and they also pay dividends. Let's take a look at why their share prices could take off and assess which one is the better all-around buy.

Does Eli Lilly's work on a coronavirus treatment make it an attractive buy?

Eli Lilly is one of the companies working hard to find vaccines and treatment options for the coronavirus pandemic, partnering with Takeda Pharmaceutical (NYSE:TAK) to come up with possible treatments. With hospitals under pressure around the world, there's a significant demand for a drug that can help alleviate the symptoms of COVID-19 and perhaps prevent a patient from having to visit a hospital altogether. However, Eli Lilly and Takeda aren't at the stage to even begin testing any drugs on humans yet, so it may take some time for investors to see any progress on this front.

A successful treatment would certainly boost Eli Lilly's revenue and its share price. But investors shouldn't invest primarily for that reason. Instead, they should look at the company's fundamentals and how solid of an investment it is over the long term.

Pills spilling out of a prescription bottle.

Image source: Getty Images.

One of the biggest knocks on Eli Lilly is that its revenue has struggled to grow; its sales were up a modest 4%in 2019, with multiple drugs declining year over year. The largest drop was Cialis, with its sales cut in half from 2018 as the company no longer has patent exclusivity on the drug. But Trulicity, which treats people with type 2 diabetes, continues to be a strong performer for Eli Lilly, generating $4.1 billion in revenue and growing 29% from the prior year. Despite the growth challenges, only once in the past 10 years has Eli Lilly failed to post a profit. The company's been pretty consistent in that regard.

Currently, the drug manufacturer's stock trades for about 28 times its earnings and pays investors a quarterly dividend of $0.74, which yields about 2% per year. And that's about what investors can normally expect from the typical S&P 500 stock.

Near its low, is GlaxoSmithKline cheap enough to buy?

Unlike Eli Lilly, which is closer to its high for the year than its low, GlaxoSmithKline is trading at a modest 18 times its earnings, near its 52-week low, and is a much cheaper buy. Investors may get more for their money from buying GlaxoSmithKline instead. One of its strengths has been its sales growth, with the company generating a 10% increase in its top line in 2019.

Although more than half of the company's sales come from pharmaceuticals, GlaxoSmithKline is very diverse, with vaccines accounting for 21% of its revenue and its consumer healthcare segment making up another 27% of its top line. That diversification can be key to stable, long-term growth. And the company is still expecting to expand further, expecting approvals in 2020 for drugs to treat HIV, respiratory illnesses, cancer, and other ailments. 

The company's dedication to growth is evident in its plans to form two separate companies, one that will focus on consumer healthcare and one that will focus on research and development using genetics and new technologies. The move should help drive more growth over the long term while also helping to cut down costs in the process.

Over the past 10 years, GlaxoSmithKline has consistently recorded a profit, and only three times has its profit margin been below 10%. The stock also pays a dividend, which today yields close to 7% annually.

Why GlaxoSmithKline is the better buy today

Eli Lilly has the potential to soar if it's able to come up with a treatment option for the coronavirus, but that's by no means a guarantee. If it's unsuccessful, there could be a big sell-off of its stock. And that's why GlaxoSmithKline may provide a bit more stability for investors. Not only have the company's profits been more consistent, but it's also continuing to show a lot of growth. With a more modest multiple and a better dividend, GlaxoSmithKline is the better healthcare stock to buy today.