NOVO-NORDISK A/S-SPONS ADR (NVO) Stock Fundamental Analysis
USA - NYSE:NVO - US6701002056 - ADR
61.85 USD
+3.65 (+6.27%)
61.92 USD
+0.07 (+0.11%)
Taking everything into account, NVO scores 7 out of 10 in our fundamental rating. NVO was compared to 196 industry peers in the Pharmaceuticals industry. NVO has an excellent profitability rating, but there are some minor concerns on its financial health. An interesting combination arises when we look at growth and value: NVO is growing strongly while it also seems undervalued. With these ratings, NVO could be worth investigating further for value and growth 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.
In the past 5 years NVO always reported a positive cash flow from operatings.
1.2 Ratios
NVO has a better Return On Assets (23.04%) than 97.45% of its industry peers.
With an excellent Return On Equity value of 66.09%, NVO belongs to the best of the industry, outperforming 97.96% of the companies in the same industry.
NVO's Return On Invested Capital of 41.43% is amongst the best of the industry. NVO outperforms 98.98% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NVO is significantly above the industry average of 15.28%.
The 3 year average ROIC (50.29%) for NVO is well above the current ROIC(41.43%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.04% | ||
| ROE | 66.09% | ||
| ROIC | 41.43% |
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 (35.61%) than 96.94% of its industry peers.
In the last couple of years the Profit Margin of NVO has grown nicely.
Looking at the Operating Margin, with a value of 45.78%, NVO belongs to the top of the industry, outperforming 98.47% of the companies in the same industry.
In the last couple of years the Operating Margin of NVO has grown nicely.
NVO has a better Gross Margin (83.95%) than 88.78% of its industry peers.
NVO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.78% | ||
| PM (TTM) | 35.61% | ||
| GM | 83.95% |
OM growth 3Y4.3%
OM growth 5Y1.69%
PM growth 3Y0.84%
PM growth 5Y1.73%
GM growth 3Y0.72%
GM growth 5Y0.24%
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 5.11. This indicates that NVO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of NVO (5.11) is better than 79.59% of its industry peers.
The Debt to FCF ratio of NVO is 1.61, which is an excellent value as it means it would take NVO, only 1.61 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.61, NVO belongs to the best of the industry, outperforming 94.39% of the companies in the same industry.
NVO has a Debt/Equity ratio of 0.52. This is a neutral value indicating NVO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.52, NVO is not doing good in the industry: 61.22% of the companies in the same industry are doing better.
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 | 0.52 | ||
| Debt/FCF | 1.61 | ||
| Altman-Z | 5.11 |
ROIC/WACC7.15
WACC5.79%
2.3 Liquidity
A Current Ratio of 0.78 indicates that NVO may have some problems paying its short term obligations.
NVO's Current ratio of 0.78 is on the low side compared to the rest of the industry. NVO is outperformed by 87.76% of its industry peers.
A Quick Ratio of 0.56 indicates that NVO may have some problems paying its short term obligations.
NVO has a worse Quick ratio (0.56) than 89.80% 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 | 0.78 | ||
| 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 24.25%, 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 6.68% on average per year.
NVO shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.90%.
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)24.25%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%32.74%
Revenue 1Y (TTM)20.9%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%12.93%
3.2 Future
The Earnings Per Share is expected to grow by 10.82% on average over the next years. This is quite good.
NVO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.70% yearly.
EPS Next Y11.47%
EPS Next 2Y10.46%
EPS Next 3Y10.57%
EPS Next 5Y10.82%
Revenue Next Year10.53%
Revenue Next 2Y10.11%
Revenue Next 3Y9.73%
Revenue Next 5Y9.7%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
The Price/Earnings ratio is 15.62, which indicates a correct valuation of NVO.
Compared to the rest of the industry, the Price/Earnings ratio of NVO indicates a rather cheap valuation: NVO is cheaper than 86.22% of the companies listed in the same industry.
NVO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
NVO is valuated correctly with a Price/Forward Earnings ratio of 14.11.
Based on the Price/Forward Earnings ratio, NVO is valued cheaper than 83.16% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NVO to the average of the S&P500 Index (22.88), we can say NVO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.62 | ||
| Fwd PE | 14.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NVO is valued cheaply inside the industry as 87.76% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, NVO is valued cheaper than 81.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.13 | ||
| EV/EBITDA | 10.77 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of NVO may justify a higher PE ratio.
PEG (NY)1.36
PEG (5Y)2.34
EPS Next 2Y10.46%
EPS Next 3Y10.57%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.37%, NVO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.04, NVO pays a better dividend. On top of this NVO pays more dividend than 93.88% of the companies listed in the same industry.
NVO's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.37% |
5.2 History
The dividend of NVO is nicely growing with an annual growth rate of 16.56%!
NVO has paid a dividend for at least 10 years, which is 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 45.63% 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.
DP45.63%
EPS Next 2Y10.46%
EPS Next 3Y10.57%
61.85
+3.65 (+6.27%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners36.28%
Inst Owner Change-4.28%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap274.83B
Analysts71.33
Price Target79.27 (28.16%)
Short Float %0.62%
Short Ratio1.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.37% |
Yearly Dividend1.56
Dividend Growth(5Y)16.56%
DP45.63%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.4%
Min EPS beat(2)-1.15%
Max EPS beat(2)3.94%
EPS beat(4)3
Avg EPS beat(4)2.73%
Min EPS beat(4)-1.15%
Max EPS beat(4)7.46%
EPS beat(8)6
Avg EPS beat(8)3.48%
EPS beat(12)9
Avg EPS beat(12)2.29%
EPS beat(16)12
Avg EPS beat(16)2.31%
Revenue beat(2)0
Avg Revenue beat(2)-0.85%
Min Revenue beat(2)-1.11%
Max Revenue beat(2)-0.6%
Revenue beat(4)1
Avg Revenue beat(4)0.67%
Min Revenue beat(4)-2.57%
Max Revenue beat(4)6.95%
Revenue beat(8)4
Avg Revenue beat(8)1.2%
Revenue beat(12)7
Avg Revenue beat(12)0.86%
Revenue beat(16)10
Avg Revenue beat(16)1.1%
PT rev (1m)-6.47%
PT rev (3m)-24.6%
EPS NQ rev (1m)-5.15%
EPS NQ rev (3m)-18.53%
EPS NY rev (1m)-6.89%
EPS NY rev (3m)-6.88%
Revenue NQ rev (1m)-1.47%
Revenue NQ rev (3m)-13.53%
Revenue NY rev (1m)-3.63%
Revenue NY rev (3m)-7.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.62 | ||
| Fwd PE | 14.11 | ||
| P/S | 5.56 | ||
| P/FCF | 28.13 | ||
| P/OCF | 14.26 | ||
| P/B | 10.31 | ||
| P/tB | 28.79 | ||
| EV/EBITDA | 10.77 |
EPS(TTM)3.96
EY6.4%
EPS(NY)4.38
Fwd EY7.08%
FCF(TTM)2.2
FCFY3.55%
OCF(TTM)4.34
OCFY7.01%
SpS11.13
BVpS6
TBVpS2.15
PEG (NY)1.36
PEG (5Y)2.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.04% | ||
| ROE | 66.09% | ||
| ROCE | 52% | ||
| ROIC | 41.43% | ||
| ROICexc | 44.49% | ||
| ROICexgc | 76.96% | ||
| OM | 45.78% | ||
| PM (TTM) | 35.61% | ||
| GM | 83.95% | ||
| FCFM | 19.75% |
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-Score4
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.61 | ||
| Debt/EBITDA | 0.55 | ||
| Cap/Depr | 374.26% | ||
| Cap/Sales | 19.21% | ||
| Interest Coverage | 60.84 | ||
| Cash Conversion | 76.52% | ||
| Profit Quality | 55.47% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 5.11 |
F-Score4
WACC5.79%
ROIC/WACC7.15
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)24.25%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%32.74%
EPS Next Y11.47%
EPS Next 2Y10.46%
EPS Next 3Y10.57%
EPS Next 5Y10.82%
Revenue 1Y (TTM)20.9%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%12.93%
Revenue Next Year10.53%
Revenue Next 2Y10.11%
Revenue Next 3Y9.73%
Revenue Next 5Y9.7%
EBIT growth 1Y21.88%
EBIT growth 3Y32.76%
EBIT growth 5Y20.94%
EBIT Next Year32.99%
EBIT Next 3Y20.98%
EBIT Next 5Y10.92%
FCF growth 1Y-8.73%
FCF growth 3Y13.52%
FCF growth 5Y14.4%
OCF growth 1Y35.43%
OCF growth 3Y30.05%
OCF growth 5Y20.93%