Is NYSE:NVO suited for dividend investing?

Take a closer look at NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO), a stock of interest to dividend investors uncovered by our stock screener. NYSE:NVO excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

Assessing Dividend for NYSE:NVO

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. NYSE:NVO scores a 7 out of 10:

• Compared to an average industry Dividend Yield of 4.00, NVO pays a better dividend. On top of this NVO pays more dividend than 91.54% of the companies listed in the same industry.
• The dividend of NVO is nicely growing with an annual growth rate of 11.24%!
• NVO has been paying a dividend for at least 10 years, so it has a reliable track record.
• As NVO did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
• NVO pays out 37.96% of its income as dividend. This is a sustainable payout ratio.
• The dividend of NVO is growing, but earnings are growing more, so the dividend growth is sustainable.

Analyzing Health Metrics

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:NVO, the assigned 7 reflects its health status:

• An Altman-Z score of 13.84 indicates that NVO is not in any danger for bankruptcy at the moment.
• NVO has a better Altman-Z score (13.84) than 90.05% of its industry peers.
• The Debt to FCF ratio of NVO is 0.39, which is an excellent value as it means it would take NVO, only 0.39 years of fcf income to pay off all of its debts.
• NVO's Debt to FCF ratio of 0.39 is amongst the best of the industry. NVO outperforms 96.02% of its industry peers.
• A Debt/Equity ratio of 0.19 indicates that NVO is not too dependend on debt financing.
• The current and quick ratio evaluation for NVO is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Analysis for NYSE:NVO

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:NVO has earned a 9 out of 10:

• NVO has a better Return On Assets (26.61%) than 97.51% of its industry peers.
• The Return On Equity of NVO (78.53%) is better than 98.51% of its industry peers.
• NVO's Return On Invested Capital of 56.78% is amongst the best of the industry. NVO outperforms 99.00% of its industry peers.
• NVO had an Average Return On Invested Capital over the past 3 years of 50.71%. This is significantly above the industry average of 16.40%.
• The last Return On Invested Capital (56.78%) for NVO is above the 3 year average (50.71%), which is a sign of increasing profitability.
• Looking at the Profit Margin, with a value of 36.03%, NVO belongs to the top of the industry, outperforming 95.52% of the companies in the same industry.
• NVO has a Operating Margin of 44.16%. This is amongst the best in the industry. NVO outperforms 98.01% of its industry peers.
• NVO has a better Gross Margin (84.60%) than 87.56% of its industry peers.

More Best Dividend stocks can be found in our Best Dividend screener.

Check the latest full fundamental report of NVO for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.