NOVO-NORDISK A/S-SPONS ADR (NVO) Stock Fundamental Analysis
NYSE:NVO - New York Stock Exchange, Inc. - US6701002056 - ADR - Currency: USD
Overall NVO gets a fundamental rating of 7 out of 10. We evaluated NVO against 193 industry peers in the Pharmaceuticals industry. NVO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NVO is growing strongly while it is still valued neutral. This is a good combination! This makes NVO very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
NVO had positive earnings in the past year.
NVO had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 21.68%, NVO belongs to the best of the industry, outperforming 98.91% of the companies in the same industry.
With an excellent Return On Equity value of 70.38%, NVO belongs to the best of the industry, outperforming 98.91% of the companies in the same industry.
The Return On Invested Capital of NVO (43.02%) is better than 97.83% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NVO is significantly above the industry average of 44.06%.
The 3 year average ROIC (50.29%) for NVO is well above the current ROIC(43.02%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.68% | ||
| ROE | 70.38% | ||
| ROIC | 43.02% |
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 34.78%, NVO belongs to the best of the industry, outperforming 97.28% of the companies in the same industry.
In the last couple of years the Profit Margin of NVO has grown nicely.
NVO has a Operating Margin of 46.16%. This is amongst the best in the industry. NVO outperforms 98.37% of its industry peers.
NVO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 84.67%, NVO belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
NVO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.16% | ||
| PM (TTM) | 34.78% | ||
| GM | 84.67% |
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 NVO is creating value.
NVO has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, NVO has more shares outstanding
NVO has a worse debt/assets ratio than last year.
2.2 Solvency
NVO has an Altman-Z score of 7.12. This indicates that NVO is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.12, NVO belongs to the top of the industry, outperforming 84.24% of the companies in the same industry.
The Debt to FCF ratio of NVO is 1.48, which is an excellent value as it means it would take NVO, only 1.48 years of fcf income to pay off all of its debts.
NVO has a Debt to FCF ratio of 1.48. This is amongst the best in the industry. NVO outperforms 95.11% of its industry peers.
A Debt/Equity ratio of 0.62 indicates that NVO is somewhat dependend on debt financing.
NVO has a worse Debt to Equity ratio (0.62) than 67.39% 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 | 0.62 | ||
| Debt/FCF | 1.48 | ||
| Altman-Z | 7.12 |
ROIC/WACC6.4
WACC6.72%
2.3 Liquidity
A Current Ratio of 0.74 indicates that NVO may have some problems paying its short term obligations.
The Current ratio of NVO (0.74) is worse than 94.02% of its industry peers.
A Quick Ratio of 0.55 indicates that NVO may have some problems paying its short term obligations.
NVO has a worse Quick ratio (0.55) than 94.02% of its industry peers.
The current and quick ratio evaluation for NVO 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 | 0.74 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
NVO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.49%, which is quite impressive.
Measured over the past 5 years, NVO shows a small growth in Earnings Per Share. The EPS has been growing by 6.84% on average per year.
Looking at the last year, NVO shows a very strong growth in Revenue. The Revenue has grown by 25.03%.
The Revenue has been growing by 18.94% on average over the past years. This is quite good.
EPS 1Y (TTM)22.49%
EPS 3Y3.21%
EPS 5Y6.84%
EPS Q2Q%32.64%
Revenue 1Y (TTM)25.03%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%33.16%
3.2 Future
The Earnings Per Share is expected to grow by 15.44% on average over the next years. This is quite good.
Based on estimates for the next years, NVO will show a quite strong growth in Revenue. The Revenue will grow by 13.05% on average per year.
EPS Next Y21.86%
EPS Next 2Y22.65%
EPS Next 3Y19.03%
EPS Next 5Y15.44%
Revenue Next Year22.78%
Revenue Next 2Y19.92%
Revenue Next 3Y16.63%
Revenue Next 5Y13.05%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 27.71, NVO can be considered very expensive at the moment.
Based on the Price/Earnings ratio, NVO is valued cheaply inside the industry as 82.07% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of NVO to the average of the S&P500 Index (29.01), we can say NVO is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.77, NVO is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NVO indicates a somewhat cheap valuation: NVO is cheaper than 79.35% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.40. NVO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.71 | ||
| Fwd PE | 22.77 |
4.2 Price Multiples
NVO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NVO is cheaper than 80.43% of the companies in the same industry.
NVO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NVO is cheaper than 79.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.44 | ||
| EV/EBITDA | 18.89 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
NVO has an outstanding profitability rating, which may justify a higher PE ratio.
NVO's earnings are expected to grow with 19.03% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.27
PEG (5Y)4.05
EPS Next 2Y22.65%
EPS Next 3Y19.03%
5. Dividend
5.1 Amount
NVO has a Yearly Dividend Yield of 1.92%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.36, NVO pays a better dividend. On top of this NVO pays more dividend than 90.76% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, NVO has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.92% |
5.2 History
The dividend of NVO is nicely growing with an annual growth rate of 16.56%!
NVO has been paying a dividend for at least 10 years, so it has a reliable track record.
As NVO did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)16.56%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
NVO pays out 43.71% of its income as dividend. 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.
DP43.71%
EPS Next 2Y22.65%
EPS Next 3Y19.03%
89.22
-0.33 (-0.37%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners37.62%
Inst Owner Change1.51%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap396.05B
Analysts76.13
Price Target123.2 (38.09%)
Short Float %0.31%
Short Ratio1.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.92% |
Yearly Dividend9.92
Dividend Growth(5Y)16.56%
DP43.71%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.51%
Min EPS beat(2)0.64%
Max EPS beat(2)10.39%
EPS beat(4)3
Avg EPS beat(4)3.46%
Min EPS beat(4)-4.65%
Max EPS beat(4)10.39%
EPS beat(8)6
Avg EPS beat(8)2.93%
EPS beat(12)9
Avg EPS beat(12)2.72%
EPS beat(16)13
Avg EPS beat(16)3.28%
Revenue beat(2)1
Avg Revenue beat(2)3.49%
Min Revenue beat(2)-2.57%
Max Revenue beat(2)9.55%
Revenue beat(4)2
Avg Revenue beat(4)1.88%
Min Revenue beat(4)-2.57%
Max Revenue beat(4)9.55%
Revenue beat(8)5
Avg Revenue beat(8)1.56%
Revenue beat(12)8
Avg Revenue beat(12)1.64%
Revenue beat(16)12
Avg Revenue beat(16)1.7%
PT rev (1m)-10.71%
PT rev (3m)-10.51%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)7.04%
EPS NY rev (1m)-4.04%
EPS NY rev (3m)-3.83%
Revenue NQ rev (1m)2.72%
Revenue NQ rev (3m)1.67%
Revenue NY rev (1m)0.93%
Revenue NY rev (3m)1.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.71 | ||
| Fwd PE | 22.77 | ||
| P/S | 9.7 | ||
| P/FCF | 40.44 | ||
| P/OCF | 23.29 | ||
| P/B | 19.63 | ||
| P/tB | 86.95 | ||
| EV/EBITDA | 18.89 |
EPS(TTM)3.22
EY3.61%
EPS(NY)3.92
Fwd EY4.39%
FCF(TTM)2.21
FCFY2.47%
OCF(TTM)3.83
OCFY4.29%
SpS9.2
BVpS4.54
TBVpS1.03
PEG (NY)1.27
PEG (5Y)4.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.68% | ||
| ROE | 70.38% | ||
| ROCE | 53.99% | ||
| ROIC | 43.02% | ||
| ROICexc | 48.11% | ||
| ROICexgc | 96.32% | ||
| OM | 46.16% | ||
| PM (TTM) | 34.78% | ||
| GM | 84.67% | ||
| FCFM | 23.99% |
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 | 0.62 | ||
| Debt/FCF | 1.48 | ||
| Debt/EBITDA | 0.59 | ||
| Cap/Depr | 268.54% | ||
| Cap/Sales | 17.67% | ||
| Interest Coverage | 219.02 | ||
| Cash Conversion | 78.99% | ||
| Profit Quality | 68.98% | ||
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.55 | ||
| Altman-Z | 7.12 |
F-Score5
WACC6.72%
ROIC/WACC6.4
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)22.49%
EPS 3Y3.21%
EPS 5Y6.84%
EPS Q2Q%32.64%
EPS Next Y21.86%
EPS Next 2Y22.65%
EPS Next 3Y19.03%
EPS Next 5Y15.44%
Revenue 1Y (TTM)25.03%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%33.16%
Revenue Next Year22.78%
Revenue Next 2Y19.92%
Revenue Next 3Y16.63%
Revenue Next 5Y13.05%
EBIT growth 1Y30.68%
EBIT growth 3Y32.76%
EBIT growth 5Y20.94%
EBIT Next Year37.19%
EBIT Next 3Y19.26%
EBIT Next 5Y15.4%
FCF growth 1Y-0.5%
FCF growth 3Y13.52%
FCF growth 5Y14.4%
OCF growth 1Y11.07%
OCF growth 3Y30.05%
OCF growth 5Y20.93%