NOVO-NORDISK A/S-SPONS ADR (NVO) Stock Fundamental Analysis
NYSE:NVO - New York Stock Exchange, Inc. - US6701002056 - ADR - Currency: USD
Taking everything into account, NVO scores 8 out of 10 in our fundamental rating. NVO was compared to 195 industry peers in the Pharmaceuticals industry. Both the health and profitability get an excellent rating, making NVO a very profitable company, without any liquidiy or solvency issues. NVO is growing strongly while it also seems undervalued. This is an interesting combination With these ratings, NVO could be worth investigating further for value and growth and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year NVO was profitable.
In the past year NVO had a positive cash flow from operations.
In the past 5 years NVO has always been profitable.
Each year in the past 5 years NVO had a positive operating cash flow.
1.2 Ratios
NVO has a better Return On Assets (21.39%) than 99.49% of its industry peers.
NVO has a better Return On Equity (75.51%) than 98.97% of its industry peers.
NVO's Return On Invested Capital of 44.39% is amongst the best of the industry. NVO outperforms 99.49% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NVO is significantly above the industry average of 14.87%.
The last Return On Invested Capital (44.39%) for NVO is well below the 3 year average (50.29%), which needs to be investigated, but indicates that NVO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.39% | ||
| ROE | 75.51% | ||
| ROIC | 44.39% |
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
NVO has a better Profit Margin (34.51%) than 97.44% of its industry peers.
In the last couple of years the Profit Margin of NVO has grown nicely.
The Operating Margin of NVO (46.51%) is better than 97.95% of its industry peers.
In the last couple of years the Operating Margin of NVO has grown nicely.
NVO has a better Gross Margin (84.33%) than 89.74% of its industry peers.
NVO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.51% | ||
| PM (TTM) | 34.51% | ||
| GM | 84.33% |
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
NVO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NVO has less shares outstanding than it did 1 year ago.
NVO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, NVO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.17 indicates that NVO is not in any danger for bankruptcy at the moment.
NVO's Altman-Z score of 5.17 is amongst the best of the industry. NVO outperforms 81.03% of its industry peers.
NVO has a debt to FCF ratio of 1.60. This is a very positive value and a sign of high solvency as it would only need 1.60 years to pay back of all of its debts.
NVO's Debt to FCF ratio of 1.60 is amongst the best of the industry. NVO outperforms 94.87% of its industry peers.
A Debt/Equity ratio of 0.70 indicates that NVO is somewhat dependend on debt financing.
NVO's Debt to Equity ratio of 0.70 is on the low side compared to the rest of the industry. NVO is outperformed by 67.18% of its industry peers.
Even though the debt/equity ratio score it not favorable for NVO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 1.6 | ||
| Altman-Z | 5.17 |
ROIC/WACC7.57
WACC5.86%
2.3 Liquidity
A Current Ratio of 0.74 indicates that NVO may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.74, NVO is doing worse than 89.23% of the companies in the same industry.
NVO has a Quick Ratio of 0.74. This is a bad value and indicates that NVO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.56, NVO is not doing good in the industry: 89.74% of the companies in the same industry are doing better.
NVO 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
NVO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.96%, which is quite good.
The Earnings Per Share has been growing slightly by 6.68% on average over the past years.
The Revenue has grown by 24.11% in the past year. This is a very strong growth!
Measured over the past years, NVO shows a quite strong growth in Revenue. The Revenue has been growing by 18.94% on average per year.
EPS 1Y (TTM)17.96%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%14.96%
Revenue 1Y (TTM)24.11%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%19.49%
3.2 Future
NVO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.29% yearly.
NVO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.94% yearly.
EPS Next Y19.72%
EPS Next 2Y21.13%
EPS Next 3Y18.2%
EPS Next 5Y14.29%
Revenue Next Year19.4%
Revenue Next 2Y17.49%
Revenue Next 3Y15.32%
Revenue Next 5Y11.94%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 18.77 indicates a rather expensive valuation of NVO.
NVO's Price/Earnings ratio is rather cheap when compared to the industry. NVO is cheaper than 83.59% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.28, NVO is valued a bit cheaper.
NVO is valuated correctly with a Price/Forward Earnings ratio of 13.28.
NVO's Price/Forward Earnings ratio is rather cheap when compared to the industry. NVO is cheaper than 80.51% of the companies in the same industry.
NVO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.77 | ||
| Fwd PE | 13.28 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NVO indicates a rather cheap valuation: NVO is cheaper than 82.56% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, NVO is valued cheaper than 80.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.36 | ||
| EV/EBITDA | 12.64 |
4.3 Compensation for Growth
NVO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NVO has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as NVO's earnings are expected to grow with 18.20% in the coming years.
PEG (NY)0.95
PEG (5Y)2.81
EPS Next 2Y21.13%
EPS Next 3Y18.2%
5. Dividend
5.1 Amount
NVO has a Yearly Dividend Yield of 2.65%. Purely for dividend investing, there may be better candidates out there.
NVO's Dividend Yield is rather good when compared to the industry average which is at 4.12. NVO pays more dividend than 93.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, NVO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
5.2 History
On average, the dividend of NVO grows each year by 16.56%, which is quite nice.
NVO has been paying a dividend for at least 10 years, so it has a reliable track record.
NVO has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)16.56%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
48.61% of the earnings are spent on dividend by NVO. This is a bit on the high side, but may be sustainable.
NVO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP48.61%
EPS Next 2Y21.13%
EPS Next 3Y18.2%
69.82
0 (0%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners36.28%
Inst Owner Change-1.5%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap310.24B
Analysts74.38
Price Target102.22 (46.41%)
Short Float %0.64%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
Yearly Dividend1.56
Dividend Growth(5Y)16.56%
DP48.61%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.7%
Min EPS beat(2)3.94%
Max EPS beat(2)7.46%
EPS beat(4)3
Avg EPS beat(4)1.85%
Min EPS beat(4)-4.65%
Max EPS beat(4)7.46%
EPS beat(8)6
Avg EPS beat(8)2.79%
EPS beat(12)9
Avg EPS beat(12)2.12%
EPS beat(16)13
Avg EPS beat(16)2.95%
Revenue beat(2)1
Avg Revenue beat(2)2.92%
Min Revenue beat(2)-1.11%
Max Revenue beat(2)6.95%
Revenue beat(4)1
Avg Revenue beat(4)0.36%
Min Revenue beat(4)-2.57%
Max Revenue beat(4)6.95%
Revenue beat(8)4
Avg Revenue beat(8)0.95%
Revenue beat(12)7
Avg Revenue beat(12)0.8%
Revenue beat(16)11
Avg Revenue beat(16)1.29%
PT rev (1m)-1.45%
PT rev (3m)-16.42%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-12.39%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.31%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.18%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.77 | ||
| Fwd PE | 13.28 | ||
| P/S | 6.47 | ||
| P/FCF | 26.36 | ||
| P/OCF | 14.93 | ||
| P/B | 14.15 | ||
| P/tB | 67.21 | ||
| EV/EBITDA | 12.64 |
EPS(TTM)3.72
EY5.33%
EPS(NY)5.26
Fwd EY7.53%
FCF(TTM)2.65
FCFY3.79%
OCF(TTM)4.68
OCFY6.7%
SpS10.8
BVpS4.94
TBVpS1.04
PEG (NY)0.95
PEG (5Y)2.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.39% | ||
| ROE | 75.51% | ||
| ROCE | 55.72% | ||
| ROIC | 44.39% | ||
| ROICexc | 53.11% | ||
| ROICexgc | 110% | ||
| OM | 46.51% | ||
| PM (TTM) | 34.51% | ||
| GM | 84.33% | ||
| FCFM | 24.53% |
ROA(3y)23.77%
ROA(5y)24.99%
ROE(3y)71.81%
ROE(5y)69.89%
ROIC(3y)50.29%
ROIC(5y)49.64%
ROICexc(3y)60.7%
ROICexc(5y)59.32%
ROICexgc(3y)124.92%
ROICexgc(5y)112.44%
ROCE(3y)63.71%
ROCE(5y)65.35%
ROICexcg growth 3Y-1.28%
ROICexcg growth 5Y0.46%
ROICexc growth 3Y-2.16%
ROICexc growth 5Y-9.95%
OM growth 3Y4.3%
OM growth 5Y1.69%
PM growth 3Y0.84%
PM growth 5Y1.73%
GM growth 3Y0.72%
GM growth 5Y0.24%
F-Score5
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 1.6 | ||
| Debt/EBITDA | 0.6 | ||
| Cap/Depr | 284.1% | ||
| Cap/Sales | 18.77% | ||
| Interest Coverage | 108.03 | ||
| Cash Conversion | 81.52% | ||
| Profit Quality | 71.08% | ||
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 5.17 |
F-Score5
WACC5.86%
ROIC/WACC7.57
Cap/Depr(3y)294.05%
Cap/Depr(5y)277.71%
Cap/Sales(3y)14.25%
Cap/Sales(5y)13.08%
Profit Quality(3y)89.38%
Profit Quality(5y)87.75%
High Growth Momentum
Growth
EPS 1Y (TTM)17.96%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%14.96%
EPS Next Y19.72%
EPS Next 2Y21.13%
EPS Next 3Y18.2%
EPS Next 5Y14.29%
Revenue 1Y (TTM)24.11%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%19.49%
Revenue Next Year19.4%
Revenue Next 2Y17.49%
Revenue Next 3Y15.32%
Revenue Next 5Y11.94%
EBIT growth 1Y28.85%
EBIT growth 3Y32.76%
EBIT growth 5Y20.94%
EBIT Next Year32.99%
EBIT Next 3Y20.98%
EBIT Next 5Y13.43%
FCF growth 1Y10.42%
FCF growth 3Y13.52%
FCF growth 5Y14.4%
OCF growth 1Y54.2%
OCF growth 3Y30.05%
OCF growth 5Y20.93%