Balancing Dividends and Fundamentals: The Case of NYSE:NVS.

Unearth the potential of NOVARTIS AG-SPONSORED ADR (NYSE:NVS) as a dividend stock recommended by our stock screening tool. NYSE:NVS maintains a robust financial footing and delivers a sustainable dividend. We'll delve into the details below.

Looking at the Dividend

To gauge a stock's dividend quality, ChartMill utilizes a Dividend Rating ranging from 0 to 10. This comprehensive assessment considers various dividend aspects, including yield, history, growth, and sustainability. NYSE:NVS has achieved a 7 out of 10:

• Compared to an average industry Dividend Yield of 4.09, NVS pays a better dividend. On top of this NVS pays more dividend than 94.85% of the companies listed in the same industry.
• Compared to an average S&P500 Dividend Yield of 2.37, NVS pays a better dividend.
• NVS has been paying a dividend for at least 10 years, so it has a reliable track record.
• 29.69% of the earnings are spent on dividend by NVS. This is a low number and sustainable payout ratio.
• NVS's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Health Examination for NYSE:NVS

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:NVS, the assigned 6 reflects its health status:

• NVS has an Altman-Z score of 3.97. This indicates that NVS is financially healthy and has little risk of bankruptcy at the moment.
• NVS has a Altman-Z score of 3.97. This is in the better half of the industry: NVS outperforms 79.90% of its industry peers.
• The Debt to FCF ratio of NVS is 2.63, which is a good value as it means it would take NVS, 2.63 years of fcf income to pay off all of its debts.
• The Debt to FCF ratio of NVS (2.63) is better than 91.75% of its industry peers.
• NVS has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
• NVS does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

A Closer Look at Profitability for NYSE:NVS

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:NVS has earned a 8 out of 10:

• The Return On Assets of NVS (18.59%) is better than 97.42% of its industry peers.
• The Return On Equity of NVS (44.20%) is better than 94.85% of its industry peers.
• The Return On Invested Capital of NVS (22.58%) is better than 97.42% of its industry peers.
• The 3 year average ROIC (11.23%) for NVS is below the current ROIC(22.58%), indicating increased profibility in the last year.
• NVS has a Profit Margin of 29.84%. This is amongst the best in the industry. NVS outperforms 95.36% of its industry peers.
• In the last couple of years the Profit Margin of NVS has grown nicely.
• NVS's Operating Margin of 28.04% is amongst the best of the industry. NVS outperforms 93.30% of its industry peers.
• In the last couple of years the Operating Margin of NVS has grown nicely.
• The Gross Margin of NVS (74.29%) is better than 79.38% of its industry peers.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

For an up to date full fundamental analysis you can check the fundamental report of NVS

Disclaimer

This article should in no way be interpreted as advice. 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.