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

Last update: Jan 3, 2025

Consider NOVARTIS AG-SPONSORED ADR (NYSE:NVS) as a top pick for dividend investors, identified by our stock screening tool. NYSE:NVS shines in terms of profitability, solvency, and liquidity, all while paying a decent dividend. Let's dive deeper into the analysis.

Looking at the Dividend

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:NVS scores a 7 out of 10:

NVS's Dividend Yield is rather good when compared to the industry average which is at 4.39. NVS pays more dividend than 94.02% of the companies in the same industry.
NVS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.30.
NVS has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of NVS is growing, but earnings are growing more, so the dividend growth is sustainable.

A Closer Look at Health for NYSE:NVS

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:NVS has earned a 7 out of 10:

NVS has an Altman-Z score of 3.74. This indicates that NVS is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.74, NVS is in the better half of the industry, outperforming 76.63% of the companies in the same industry.
NVS has a debt to FCF ratio of 2.07. This is a good value and a sign of high solvency as NVS would need 2.07 years to pay back of all of its debts.
NVS has a Debt to FCF ratio of 2.07. This is amongst the best in the industry. NVS outperforms 94.57% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that NVS is not too dependend on debt financing.
Even though the debt/equity ratio score it not favorable for NVS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
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.

Assessing Profitability for NYSE:NVS

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:NVS scores a 9 out of 10:

NVS has a Return On Assets of 18.66%. This is amongst the best in the industry. NVS outperforms 98.37% of its industry peers.
NVS's Return On Equity of 44.37% is amongst the best of the industry. NVS outperforms 96.74% of its industry peers.
NVS has a better Return On Invested Capital (20.91%) than 96.20% of its industry peers.
The 3 year average ROIC (11.23%) for NVS is below the current ROIC(20.91%), indicating increased profibility in the last year.
NVS has a better Profit Margin (35.25%) than 97.28% of its industry peers.
In the last couple of years the Profit Margin of NVS has grown nicely.
Looking at the Operating Margin, with a value of 30.55%, NVS belongs to the top of the industry, outperforming 94.02% of the companies in the same industry.
NVS's Operating Margin has improved in the last couple of years.
NVS has a better Gross Margin (74.99%) than 81.52% of its industry peers.

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

Our latest full fundamental report of NVS contains the most current fundamental analsysis.

Disclaimer

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.