Millions of people have benefited from medications developed by Pfizer (PFE -3.85%) and Eli Lilly (LLY -1.00%) through the years. Quite a few investors have also benefited from the two big drugmakers' steady dividends.

Which is the better dividend stock now? Here's how Pfizer and Lilly stack up against each other.

The case for Pfizer

Pfizer has paid a dividend for 334 consecutive quarters. To put that into perspective, Franklin D. Roosevelt was still in his second term as U.S. president when Pfizer initiated its dividend. The company has increased its dividend for 12 years in a row. Over the past five years, Pfizer boosted its dividend payout by 25%.

But it's Pfizer's dividend yield that income investors especially like. That yield currently stands at 3.1%. In recent years, the drugmaker's dividend routinely topped 4%. It's lower now only because Pfizer stock has performed really well over the last 12 months.

You shouldn't have to worry about Pfizer's dividend declining, either. The company's dividend payout ratio of 35% is exceptionally low. This indicates that Pfizer generates more than enough earnings to cover the dividend at current levels.

Granted, those earnings could be less attractive in the future. There's a lot of uncertainty about how strong the COVID-19 market will be over the long term. In its latest quarter, Pfizer's COVID-19 products, Comirnaty and Paxlovid, contributed 57% of total revenue. The big pharma company also faces the loss of exclusivity for several top-selling drugs in the second half of this decade.

On the other hand, Pfizer also has several new products that should drive growth. In particular, etrasimod (an autoimmune-disease drug Pfizer picked up with its acquisition of Arena Pharmaceuticals) could be the company's next blockbuster.

The case for Lilly

Eli Lilly has distributed a dividend to shareholders every year since 1885. In case you were wondering who was U.S. president then, the answer is Grover Cleveland. Lilly has increased its dividend for eight consecutive years, with its dividend payout nearly doubling during the period.

Lilly's dividend yield is relatively low, though, at close to 1.2%. It's not because the company hasn't paid an attractive dividend. The reason the yield is low is that Lilly's share price has more than tripled over the past three years. Around 35% of this gain came over the last 12 months.

The drugmaker's dividend payout ratio stands at a healthy 52.5%. Lilly's earnings outlook is bright. Wall Street expects the company to deliver double-digit-percentage annual earnings growth over the next five years. 

Lilly has multiple products in its lineup that continue to enjoy strong sales momentum. Diabetes drugs Trulicity and Jardiance, autoimmune-disease drugs Olumiant and Taltz, and breast cancer drug Verzenio especially stand out. Lilly has also achieved notable success with its COVID-19 monoclonal antibody therapies.

Better dividend stock?

It's an easy decision between these two stocks for investors strictly looking for income. Pfizer offers a much more attractive dividend yield than Lilly does. Even if Lilly continues to increase its dividend significantly in the coming years (which seems likely), its yield probably won't catch up to Pfizer's.

However, determining which stock will probably deliver the greater total return over the next five to 10 years isn't so easy. Lilly appears to have more reliable growth prospects. But Pfizer's prospects could be better than expected if the demand for Comirnaty, Paxlovid, and any successor products remain strong.

Also, the market has priced in much more optimistic expectations for Lilly than it has for Pfizer. Lilly's shares currently trade at nearly 40 times expected earnings, making it one of the more expensive pharma stocks. Pfizer's forward earnings multiple is only around 7.7. 

With all things considered, my view is that Pfizer gets the nod as the better dividend stock. However, I think that both of these stocks could be winners over the long term.