NOVO NORDISK A/S-B (NOV.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:NOV - DK0062498333 - Common Stock
53.22 EUR
-0.52 (-0.97%)
We assign a fundamental rating of 6 out of 10 to NOV. NOV was compared to 55 industry peers in the Pharmaceuticals industry. While NOV has a great profitability rating, there are some minor concerns on its financial health. NOV is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- NOV had positive earnings in the past year.
- In the past year NOV had a positive cash flow from operations.
- In the past 5 years NOV has always been profitable.
- Each year in the past 5 years NOV had a positive operating cash flow.
1.2 Ratios
- NOV's Return On Assets of 20.26% is amongst the best of the industry. NOV outperforms 98.18% of its industry peers.
- Looking at the Return On Equity, with a value of 61.08%, NOV belongs to the top of the industry, outperforming 94.55% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 38.03%, NOV belongs to the best of the industry, outperforming 98.18% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for NOV is significantly above the industry average of 14.00%.
- The 3 year average ROIC (50.29%) for NOV is well above the current ROIC(38.03%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.26% | ||
| ROE | 61.08% | ||
| ROIC | 38.03% |
ROA(3y)23.77%
ROA(5y)24.99%
ROE(3y)71.81%
ROE(5y)69.89%
ROIC(3y)50.29%
ROIC(5y)49.64%
1.3 Margins
- With an excellent Profit Margin value of 32.88%, NOV belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- NOV's Profit Margin has improved in the last couple of years.
- The Operating Margin of NOV (42.03%) is better than 94.55% of its industry peers.
- In the last couple of years the Operating Margin of NOV has grown nicely.
- NOV's Gross Margin of 82.05% is amongst the best of the industry. NOV outperforms 85.45% of its industry peers.
- In the last couple of years the Gross Margin of NOV has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.03% | ||
| PM (TTM) | 32.88% | ||
| GM | 82.05% |
OM growth 3Y4.3%
OM growth 5Y1.69%
PM growth 3Y0.84%
PM growth 5Y1.73%
GM growth 3Y0.72%
GM growth 5Y0.24%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NOV is creating value.
- NOV has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, NOV has more shares outstanding
- NOV has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.94 indicates that NOV is not in any danger for bankruptcy at the moment.
- NOV's Altman-Z score of 4.94 is fine compared to the rest of the industry. NOV outperforms 72.73% of its industry peers.
- NOV has a debt to FCF ratio of 1.66. This is a very positive value and a sign of high solvency as it would only need 1.66 years to pay back of all of its debts.
- With an excellent Debt to FCF ratio value of 1.66, NOV belongs to the best of the industry, outperforming 89.09% of the companies in the same industry.
- NOV has a Debt/Equity ratio of 0.52. This is a neutral value indicating NOV is somewhat dependend on debt financing.
- NOV has a better Debt to Equity ratio (0.52) than 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.66 | ||
| Altman-Z | 4.94 |
ROIC/WACC6.05
WACC6.29%
2.3 Liquidity
- NOV has a Current Ratio of 0.78. This is a bad value and indicates that NOV is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.78, NOV is not doing good in the industry: 85.45% of the companies in the same industry are doing better.
- A Quick Ratio of 0.57 indicates that NOV may have some problems paying its short term obligations.
- With a Quick ratio value of 0.57, NOV is not doing good in the industry: 80.00% of the companies in the same industry are doing better.
- The current and quick ratio evaluation for NOV 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
- NOV shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.05%, which is quite good.
- The Earnings Per Share has been growing by 22.54% on average over the past years. This is a very strong growth
- The Revenue has grown by 16.64% in the past year. This is quite good.
- Measured over the past years, NOV shows a quite strong growth in Revenue. The Revenue has been growing by 18.94% on average per year.
EPS 1Y (TTM)10.05%
EPS 3Y29.71%
EPS 5Y22.54%
EPS Q2Q%-26.47%
Revenue 1Y (TTM)16.64%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%5.14%
3.2 Future
- The Earnings Per Share is expected to grow by 5.49% on average over the next years.
- Based on estimates for the next years, NOV will show a small growth in Revenue. The Revenue will grow by 6.10% on average per year.
EPS Next Y4.45%
EPS Next 2Y0.33%
EPS Next 3Y2.25%
EPS Next 5Y5.49%
Revenue Next Year7.98%
Revenue Next 2Y4.04%
Revenue Next 3Y4.95%
Revenue Next 5Y6.1%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 17.06, the valuation of NOV can be described as rather expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of NOV indicates a somewhat cheap valuation: NOV is cheaper than 61.82% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of NOV to the average of the S&P500 Index (27.25), we can say NOV is valued slightly cheaper.
- A Price/Forward Earnings ratio of 17.45 indicates a rather expensive valuation of NOV.
- NOV's Price/Forward Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, NOV is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.06 | ||
| Fwd PE | 17.45 |
4.2 Price Multiples
- 63.64% of the companies in the same industry are more expensive than NOV, based on the Enterprise Value to EBITDA ratio.
- The rest of the industry has a similar Price/Free Cash Flow ratio as NOV.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.98 | ||
| EV/EBITDA | 12 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of NOV may justify a higher PE ratio.
PEG (NY)3.83
PEG (5Y)0.76
EPS Next 2Y0.33%
EPS Next 3Y2.25%
5. Dividend
5.1 Amount
- NOV has a Yearly Dividend Yield of 2.94%. Purely for dividend investing, there may be better candidates out there.
- NOV's Dividend Yield is a higher than the industry average which is at 1.62.
- Compared to an average S&P500 Dividend Yield of 1.82, NOV pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
5.2 History
- The dividend of NOV is nicely growing with an annual growth rate of 16.56%!
Dividend Growth(5Y)16.56%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- NOV pays out 49.88% of its income as dividend. This is a bit on the high side, but may be sustainable.
- NOV's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP49.88%
EPS Next 2Y0.33%
EPS Next 3Y2.25%
NOVO NORDISK A/S-B / NOV.DE FAQ
What is the fundamental rating for NOV stock?
ChartMill assigns a fundamental rating of 6 / 10 to NOV.DE.
Can you provide the valuation status for NOVO NORDISK A/S-B?
ChartMill assigns a valuation rating of 4 / 10 to NOVO NORDISK A/S-B (NOV.DE). This can be considered as Fairly Valued.
What is the profitability of NOV stock?
NOVO NORDISK A/S-B (NOV.DE) has a profitability rating of 9 / 10.
Can you provide the expected EPS growth for NOV stock?
The Earnings per Share (EPS) of NOVO NORDISK A/S-B (NOV.DE) is expected to grow by 4.45% in the next year.
Is the dividend of NOVO NORDISK A/S-B sustainable?
The dividend rating of NOVO NORDISK A/S-B (NOV.DE) is 6 / 10 and the dividend payout ratio is 49.88%.