NOVO-NORDISK A/S-SPONS ADR (NVO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NVO - US6701002056 - ADR
49.35 USD
+0.64 (+1.31%)
48.72 USD
-0.63 (-1.28%)
We assign a fundamental rating of 7 out of 10 to NVO. NVO was compared to 192 industry peers in the Pharmaceuticals industry. While NVO has a great profitability rating, there are some minor concerns on its financial health. NVO scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make NVO suitable for value investing!
1. Profitability
1.1 Basic Checks
In the past year NVO was profitable.
NVO had a positive operating cash flow in the past year.
NVO had positive earnings in each of the past 5 years.
Each year in the past 5 years NVO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NVO (20.26%) is better than 97.92% of its industry peers.
With an excellent Return On Equity value of 61.08%, NVO belongs to the best of the industry, outperforming 98.44% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 38.03%, NVO belongs to the top of the industry, outperforming 98.96% of the companies in the same industry.
NVO had an Average Return On Invested Capital over the past 3 years of 50.29%. This is significantly above the industry average of 12.71%.
The 3 year average ROIC (50.29%) for NVO 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
The Profit Margin of NVO (32.88%) is better than 96.88% of its industry peers.
NVO's Profit Margin has improved in the last couple of years.
NVO has a better Operating Margin (42.03%) than 97.92% of its industry peers.
NVO's Operating Margin has improved in the last couple of years.
NVO has a Gross Margin of 82.05%. This is amongst the best in the industry. NVO outperforms 85.42% of its industry peers.
In the last couple of years the Gross Margin of NVO 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NVO is creating value.
NVO has less shares outstanding than it did 1 year ago.
The number of shares outstanding for NVO has been increased compared to 5 years ago.
NVO has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.29 indicates that NVO is not in any danger for bankruptcy at the moment.
The Altman-Z score of NVO (4.29) is better than 72.92% of its industry peers.
NVO 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.
NVO's Debt to FCF ratio of 1.66 is amongst the best of the industry. NVO outperforms 94.27% of its industry peers.
A Debt/Equity ratio of 0.52 indicates that NVO is somewhat dependend on debt financing.
NVO's Debt to Equity ratio of 0.52 is on the low side compared to the rest of the industry. NVO is outperformed by 62.50% 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 | 0.52 | ||
| Debt/FCF | 1.66 | ||
| Altman-Z | 4.29 |
ROIC/WACC6.52
WACC5.83%
2.3 Liquidity
A Current Ratio of 0.78 indicates that NVO may have some problems paying its short term obligations.
NVO has a Current ratio of 0.78. This is amonst the worse of the industry: NVO underperforms 89.58% of its industry peers.
NVO has a Quick Ratio of 0.78. This is a bad value and indicates that NVO is not financially healthy enough and could expect problems in meeting its short term obligations.
NVO's Quick ratio of 0.57 is on the low side compared to the rest of the industry. NVO is outperformed by 89.58% of its industry peers.
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 | 0.78 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
NVO 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 slightly by 6.68% on average over the past years.
The Revenue has grown by 16.64% in the past year. This is quite good.
The Revenue has been growing by 18.94% on average over the past years. This is quite good.
EPS 1Y (TTM)10.05%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%-26.47%
Revenue 1Y (TTM)16.64%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%5.14%
3.2 Future
NVO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.93% yearly.
The Revenue is expected to grow by 7.05% on average over the next years.
EPS Next Y5.73%
EPS Next 2Y6.44%
EPS Next 3Y6.78%
EPS Next 5Y6.93%
Revenue Next Year9.95%
Revenue Next 2Y7.78%
Revenue Next 3Y7.4%
Revenue Next 5Y7.05%
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 stable.
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
A Price/Earnings ratio of 13.63 indicates a correct valuation of NVO.
Based on the Price/Earnings ratio, NVO is valued cheaper than 87.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.31, NVO is valued a bit cheaper.
The Price/Forward Earnings ratio is 12.42, which indicates a correct valuation of NVO.
Based on the Price/Forward Earnings ratio, NVO is valued cheaper than 84.90% of the companies in the same industry.
NVO is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 12.42 |
4.2 Price Multiples
NVO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NVO is cheaper than 89.58% of the companies in the same industry.
83.33% of the companies in the same industry are more expensive than NVO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.23 | ||
| EV/EBITDA | 9.62 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NVO does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of NVO may justify a higher PE ratio.
PEG (NY)2.38
PEG (5Y)2.04
EPS Next 2Y6.44%
EPS Next 3Y6.78%
5. Dividend
5.1 Amount
NVO has a Yearly Dividend Yield of 2.63%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.81, NVO pays a better dividend. On top of this NVO pays more dividend than 94.27% of the companies listed in the same industry.
NVO's Dividend Yield is comparable with the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
5.2 History
On average, the dividend of NVO grows each year by 16.56%, which is quite nice.
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 49.88% 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.
DP49.88%
EPS Next 2Y6.44%
EPS Next 3Y6.78%
49.35
+0.64 (+1.31%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners36.01%
Inst Owner Change-4.45%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap219.29B
Revenue(TTM)315.60B
Net Income(TTM)103.77B
Analysts74.19
Price Target66.81 (35.38%)
Short Float %0.68%
Short Ratio1.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
Yearly Dividend1.54
Dividend Growth(5Y)16.56%
DP49.88%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.09%
Min EPS beat(2)-7.04%
Max EPS beat(2)-1.15%
EPS beat(4)2
Avg EPS beat(4)0.81%
Min EPS beat(4)-7.04%
Max EPS beat(4)7.46%
EPS beat(8)5
Avg EPS beat(8)1.75%
EPS beat(12)8
Avg EPS beat(12)1.59%
EPS beat(16)11
Avg EPS beat(16)1.6%
Revenue beat(2)0
Avg Revenue beat(2)-1.81%
Min Revenue beat(2)-3.19%
Max Revenue beat(2)-0.44%
Revenue beat(4)1
Avg Revenue beat(4)0.55%
Min Revenue beat(4)-3.19%
Max Revenue beat(4)6.95%
Revenue beat(8)3
Avg Revenue beat(8)0.61%
Revenue beat(12)6
Avg Revenue beat(12)0.51%
Revenue beat(16)9
Avg Revenue beat(16)0.77%
PT rev (1m)-12.75%
PT rev (3m)-18.12%
EPS NQ rev (1m)-3.62%
EPS NQ rev (3m)-7.2%
EPS NY rev (1m)-3.17%
EPS NY rev (3m)-5.15%
Revenue NQ rev (1m)-4.57%
Revenue NQ rev (3m)-6.81%
Revenue NY rev (1m)-0.33%
Revenue NY rev (3m)-0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 12.42 | ||
| P/S | 4.49 | ||
| P/FCF | 23.23 | ||
| P/OCF | 11.44 | ||
| P/B | 8.33 | ||
| P/tB | 22.37 | ||
| EV/EBITDA | 9.62 |
EPS(TTM)3.62
EY7.34%
EPS(NY)3.97
Fwd EY8.05%
FCF(TTM)2.12
FCFY4.3%
OCF(TTM)4.31
OCFY8.74%
SpS11
BVpS5.92
TBVpS2.21
PEG (NY)2.38
PEG (5Y)2.04
Graham Number21.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.26% | ||
| ROE | 61.08% | ||
| ROCE | 47.73% | ||
| ROIC | 38.03% | ||
| ROICexc | 43.08% | ||
| ROICexgc | 76.17% | ||
| OM | 42.03% | ||
| PM (TTM) | 32.88% | ||
| GM | 82.05% | ||
| FCFM | 19.31% |
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%
ROICexgc growth 3Y-1.28%
ROICexgc 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 Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.66 | ||
| Debt/EBITDA | 0.58 | ||
| Cap/Depr | 290.66% | ||
| Cap/Sales | 19.91% | ||
| Interest Coverage | 53.02 | ||
| Cash Conversion | 80.23% | ||
| Profit Quality | 58.73% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.57 | ||
| Altman-Z | 4.29 |
F-Score4
WACC5.83%
ROIC/WACC6.52
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)10.05%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%-26.47%
EPS Next Y5.73%
EPS Next 2Y6.44%
EPS Next 3Y6.78%
EPS Next 5Y6.93%
Revenue 1Y (TTM)16.64%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%5.14%
Revenue Next Year9.95%
Revenue Next 2Y7.78%
Revenue Next 3Y7.4%
Revenue Next 5Y7.05%
EBIT growth 1Y6.92%
EBIT growth 3Y32.76%
EBIT growth 5Y20.94%
EBIT Next Year21.98%
EBIT Next 3Y13.55%
EBIT Next 5Y9.17%
FCF growth 1Y-21.68%
FCF growth 3Y13.52%
FCF growth 5Y14.4%
OCF growth 1Y16.27%
OCF growth 3Y30.05%
OCF growth 5Y20.93%
NOVO-NORDISK A/S-SPONS ADR / NVO FAQ
Can you provide the ChartMill fundamental rating for NOVO-NORDISK A/S-SPONS ADR?
ChartMill assigns a fundamental rating of 7 / 10 to NVO.
Can you provide the valuation status for NOVO-NORDISK A/S-SPONS ADR?
ChartMill assigns a valuation rating of 7 / 10 to NOVO-NORDISK A/S-SPONS ADR (NVO). This can be considered as Undervalued.
Can you provide the profitability details for NOVO-NORDISK A/S-SPONS ADR?
NOVO-NORDISK A/S-SPONS ADR (NVO) has a profitability rating of 9 / 10.
What is the financial health of NOVO-NORDISK A/S-SPONS ADR (NVO) stock?
The financial health rating of NOVO-NORDISK A/S-SPONS ADR (NVO) is 6 / 10.
Can you provide the dividend sustainability for NVO stock?
The dividend rating of NOVO-NORDISK A/S-SPONS ADR (NVO) is 6 / 10 and the dividend payout ratio is 49.88%.