Why the dividend investor may take a look at NYSE:NVS.

Last update: Dec 13, 2024

Take a closer look at NOVARTIS AG-SPONSORED ADR (NYSE:NVS), a stock of interest to dividend investors uncovered by our stock screener. NYSE:NVS excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

Analyzing Dividend Metrics

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. NYSE:NVS earns a 7 out of 10:

Compared to an average industry Dividend Yield of 4.21, NVS pays a better dividend. On top of this NVS pays more dividend than 94.24% of the companies listed in the same industry.
NVS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.20.
NVS has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of NVS is growing, but earnings are growing more, so the dividend growth is sustainable.

What does the Health looks like for NYSE:NVS

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:NVS was assigned a score of 7 for health:

An Altman-Z score of 3.80 indicates that NVS is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.80, NVS is doing good in the industry, outperforming 76.96% of the companies in the same industry.
The Debt to FCF ratio of NVS is 2.07, which is a good value as it means it would take NVS, 2.07 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of NVS (2.07) is better than 94.24% 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.
Although NVS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
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.

Understanding NYSE:NVS's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:NVS, the assigned 9 is noteworthy for profitability:

NVS has a Return On Assets of 18.66%. This is amongst the best in the industry. NVS outperforms 98.43% of its industry peers.
NVS has a Return On Equity of 44.37%. This is amongst the best in the industry. NVS outperforms 96.34% of its industry peers.
The Return On Invested Capital of NVS (20.91%) is better than 96.34% of its industry peers.
The last Return On Invested Capital (20.91%) for NVS is above the 3 year average (11.23%), which is a sign of increasing profitability.
NVS's Profit Margin of 35.25% is amongst the best of the industry. NVS outperforms 97.38% of its industry peers.
NVS's Profit Margin has improved in the last couple of years.
NVS has a Operating Margin of 30.55%. This is amongst the best in the industry. NVS outperforms 94.24% of its industry peers.
NVS's Operating Margin has improved in the last couple of years.
NVS has a better Gross Margin (74.99%) than 82.20% of its industry peers.

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

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.