NOVO NORDISK A/S-B (NOV.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:NOV - DK0062498333 - Common Stock
53.74 EUR
+0.68 (+1.28%)
NOV gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 54 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
- The Return On Assets of NOV (20.26%) is better than 98.15% 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 94.44% of the companies in the same industry.
- The Return On Invested Capital of NOV (38.03%) is better than 98.15% of its industry peers.
- NOV had an Average Return On Invested Capital over the past 3 years of 50.29%. This is significantly above the industry average of 13.93%.
- The last Return On Invested Capital (38.03%) for NOV is well below the 3 year average (50.29%), which needs to be investigated, but indicates that NOV had better years and this may not be a problem.
| 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
- Looking at the Profit Margin, with a value of 32.88%, NOV belongs to the top 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.
- NOV has a better Operating Margin (42.03%) than 94.44% of its industry peers.
- In the last couple of years the Operating Margin of NOV has grown nicely.
- With an excellent Gross Margin value of 82.05%, NOV belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
- NOV's Gross Margin has been stable in the last couple of years.
| 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NOV is creating value.
- The number of shares outstanding for NOV has been reduced compared to 1 year ago.
- Compared to 5 years ago, NOV has more shares outstanding
- The debt/assets ratio for NOV is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 4.90 indicates that NOV is not in any danger for bankruptcy at the moment.
- With a decent Altman-Z score value of 4.90, NOV is doing good in the industry, outperforming 68.52% of the companies in the same industry.
- 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.
- NOV's Debt to FCF ratio of 1.66 is amongst the best of the industry. NOV outperforms 88.89% of its industry peers.
- NOV has a Debt/Equity ratio of 0.52. This is a neutral value indicating NOV is somewhat dependend on debt financing.
- NOV's Debt to Equity ratio of 0.52 is fine compared to the rest of the industry. NOV outperforms 62.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.66 | ||
| Altman-Z | 4.9 |
ROIC/WACC6.09
WACC6.24%
2.3 Liquidity
- A Current Ratio of 0.78 indicates that NOV may have some problems paying its short term obligations.
- NOV has a Current ratio of 0.78. This is amonst the worse of the industry: NOV underperforms 85.19% of its industry peers.
- NOV has a Quick 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.
- The Quick ratio of NOV (0.57) is worse than 79.63% of its industry peers.
- 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
- NOV shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.64%.
- 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
- NOV is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.49% yearly.
- 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 Y4.79%
EPS Next 2Y0.88%
EPS Next 3Y2.8%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- NOV is valuated rather expensively with a Price/Earnings ratio of 17.22.
- 62.96% of the companies in the same industry are more expensive than NOV, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 27.21. NOV is valued slightly cheaper when compared to this.
- With a Price/Forward Earnings ratio of 17.43, NOV is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of NOV is on the same level as its industry peers.
- NOV is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.22 | ||
| Fwd PE | 17.43 |
4.2 Price Multiples
- 62.96% of the companies in the same industry are more expensive than NOV, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of NOV is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.26 | ||
| EV/EBITDA | 11.86 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NOV does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of NOV may justify a higher PE ratio.
PEG (NY)3.6
PEG (5Y)0.76
EPS Next 2Y0.88%
EPS Next 3Y2.8%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.19%, NOV has a reasonable but not impressive dividend return.
- NOV's Dividend Yield is rather good when compared to the industry average which is at 1.59. NOV pays more dividend than 83.33% of the companies in the same industry.
- NOV's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
- On average, the dividend of NOV grows each year by 16.56%, which is quite nice.
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 2Y0.88%
EPS Next 3Y2.8%
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 4.79% 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%.