NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NVS - US66987V1098 - ADR
141.54 USD
+0.08 (+0.06%)
141.54 USD
0 (0%)
NVS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 191 industry peers in the Pharmaceuticals industry. NVS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NVS scores decently on growth, while it is valued quite cheap. This could make an interesting combination. NVS also has an excellent dividend rating. These ratings would make NVS suitable for value and dividend and quality investing!
1. Profitability
1.1 Basic Checks
NVS had positive earnings in the past year.
NVS had a positive operating cash flow in the past year.
Each year in the past 5 years NVS has been profitable.
In the past 5 years NVS always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.42%, NVS belongs to the top of the industry, outperforming 94.24% of the companies in the same industry.
NVS has a better Return On Equity (32.47%) than 94.24% of its industry peers.
NVS has a better Return On Invested Capital (22.36%) than 97.38% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NVS is in line with the industry average of 12.85%.
The 3 year average ROIC (14.58%) for NVS is below the current ROIC(22.36%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 32.47% | ||
| ROIC | 22.36% |
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
1.3 Margins
NVS has a better Profit Margin (25.69%) than 92.15% of its industry peers.
In the last couple of years the Profit Margin of NVS has remained more or less at the same level.
The Operating Margin of NVS (33.11%) is better than 94.76% of its industry peers.
NVS's Operating Margin has improved in the last couple of years.
NVS has a Gross Margin of 76.10%. This is amongst the best in the industry. NVS outperforms 82.20% of its industry peers.
NVS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.11% | ||
| PM (TTM) | 25.69% | ||
| GM | 76.1% |
OM growth 3Y8.17%
OM growth 5Y6.25%
PM growth 3Y-24.95%
PM growth 5Y-0.88%
GM growth 3Y0.5%
GM growth 5Y1.06%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NVS is creating value.
The number of shares outstanding for NVS has been reduced compared to 1 year ago.
Compared to 5 years ago, NVS has less shares outstanding
Compared to 1 year ago, NVS has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.21 indicates that NVS is not in any danger for bankruptcy at the moment.
NVS has a better Altman-Z score (4.21) than 69.63% of its industry peers.
The Debt to FCF ratio of NVS is 1.87, which is an excellent value as it means it would take NVS, only 1.87 years of fcf income to pay off all of its debts.
NVS has a Debt to FCF ratio of 1.87. This is amongst the best in the industry. NVS outperforms 94.24% of its industry peers.
NVS has a Debt/Equity ratio of 0.55. This is a neutral value indicating NVS is somewhat dependend on debt financing.
The Debt to Equity ratio of NVS (0.55) is worse than 65.44% of its industry peers.
Although NVS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Altman-Z | 4.21 |
ROIC/WACC4.72
WACC4.74%
2.3 Liquidity
A Current Ratio of 0.88 indicates that NVS may have some problems paying its short term obligations.
NVS has a worse Current ratio (0.88) than 86.91% of its industry peers.
NVS has a Quick Ratio of 0.88. This is a bad value and indicates that NVS is not financially healthy enough and could expect problems in meeting its short term obligations.
NVS's Quick ratio of 0.68 is on the low side compared to the rest of the industry. NVS is outperformed by 86.91% of its industry peers.
NVS 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 | 0.88 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
NVS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.33%, which is quite impressive.
The Earnings Per Share has been growing by 8.14% on average over the past years. This is quite good.
The Revenue has grown by 12.18% in the past year. This is quite good.
Measured over the past years, NVS shows a small growth in Revenue. The Revenue has been growing by 1.24% on average per year.
EPS 1Y (TTM)21.33%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%9.22%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%8.47%
3.2 Future
Based on estimates for the next years, NVS will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.35% on average per year.
NVS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.35% yearly.
EPS Next Y16.78%
EPS Next 2Y9.31%
EPS Next 3Y8.66%
EPS Next 5Y9.35%
Revenue Next Year9.91%
Revenue Next 2Y6.24%
Revenue Next 3Y5.54%
Revenue Next 5Y5.35%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.67, which indicates a correct valuation of NVS.
NVS's Price/Earnings ratio is rather cheap when compared to the industry. NVS is cheaper than 85.86% of the companies in the same industry.
NVS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.19.
The Price/Forward Earnings ratio is 15.00, which indicates a correct valuation of NVS.
Based on the Price/Forward Earnings ratio, NVS is valued cheaper than 82.72% of the companies in the same industry.
NVS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.67 | ||
| Fwd PE | 15 |
4.2 Price Multiples
84.29% of the companies in the same industry are more expensive than NVS, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 86.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.92 | ||
| EV/EBITDA | 12.26 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NVS may justify a higher PE ratio.
PEG (NY)0.93
PEG (5Y)1.92
EPS Next 2Y9.31%
EPS Next 3Y8.66%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.19%, NVS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 0.42, NVS pays a better dividend. On top of this NVS pays more dividend than 94.76% of the companies listed in the same industry.
NVS's Dividend Yield is rather good when compared to the S&P500 average which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
The dividend of NVS has a limited annual growth rate of 5.49%.
NVS has paid a dividend for at least 10 years, which is a reliable track record.
As NVS did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)5.49%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
NVS pays out 54.32% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NVS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP54.32%
EPS Next 2Y9.31%
EPS Next 3Y8.66%
141.54
+0.08 (+0.06%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners41.44%
Inst Owner Change0%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap271.59B
Revenue(TTM)56.02B
Net Income(TTM)14.39B
Analysts70.32
Price Target135.04 (-4.59%)
Short Float %0.31%
Short Ratio3.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend3.79
Dividend Growth(5Y)5.49%
DP54.32%
Div Incr Years5
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.75%
Min EPS beat(2)-2.1%
Max EPS beat(2)0.61%
EPS beat(4)3
Avg EPS beat(4)2.79%
Min EPS beat(4)-2.1%
Max EPS beat(4)6.59%
EPS beat(8)6
Avg EPS beat(8)2.02%
EPS beat(12)10
Avg EPS beat(12)3.45%
EPS beat(16)11
Avg EPS beat(16)2.48%
Revenue beat(2)0
Avg Revenue beat(2)-2.83%
Min Revenue beat(2)-2.84%
Max Revenue beat(2)-2.82%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-2.84%
Max Revenue beat(4)0.78%
Revenue beat(8)2
Avg Revenue beat(8)-1.48%
Revenue beat(12)3
Avg Revenue beat(12)-3.77%
Revenue beat(16)4
Avg Revenue beat(16)-4.02%
PT rev (1m)0%
PT rev (3m)2.66%
EPS NQ rev (1m)-0.6%
EPS NQ rev (3m)0.44%
EPS NY rev (1m)0.08%
EPS NY rev (3m)0.37%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)0.73%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.67 | ||
| Fwd PE | 15 | ||
| P/S | 4.85 | ||
| P/FCF | 15.92 | ||
| P/OCF | 12.89 | ||
| P/B | 6.13 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.26 |
EPS(TTM)9.03
EY6.38%
EPS(NY)9.44
Fwd EY6.67%
FCF(TTM)8.89
FCFY6.28%
OCF(TTM)10.98
OCFY7.76%
SpS29.2
BVpS23.1
TBVpS-5.35
PEG (NY)0.93
PEG (5Y)1.92
Graham Number68.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 32.47% | ||
| ROCE | 24.64% | ||
| ROIC | 22.36% | ||
| ROICexc | 25.65% | ||
| ROICexgc | 152.58% | ||
| OM | 33.11% | ||
| PM (TTM) | 25.69% | ||
| GM | 76.1% | ||
| FCFM | 30.45% |
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
ROICexc(3y)17.82%
ROICexc(5y)15.74%
ROICexgc(3y)90.48%
ROICexgc(5y)78.58%
ROCE(3y)16.96%
ROCE(5y)14.93%
ROICexgc growth 3Y14.29%
ROICexgc growth 5Y25.26%
ROICexc growth 3Y20.9%
ROICexc growth 5Y13.17%
OM growth 3Y8.17%
OM growth 5Y6.25%
PM growth 3Y-24.95%
PM growth 5Y-0.88%
GM growth 3Y0.5%
GM growth 5Y1.06%
F-Score7
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Debt/EBITDA | 1.01 | ||
| Cap/Depr | 74.31% | ||
| Cap/Sales | 7.16% | ||
| Interest Coverage | 18.85 | ||
| Cash Conversion | 87.98% | ||
| Profit Quality | 118.52% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 4.21 |
F-Score7
WACC4.74%
ROIC/WACC4.72
Cap/Depr(3y)51.13%
Cap/Depr(5y)48.4%
Cap/Sales(3y)6.48%
Cap/Sales(5y)6.27%
Profit Quality(3y)120.24%
Profit Quality(5y)109.63%
High Growth Momentum
Growth
EPS 1Y (TTM)21.33%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%9.22%
EPS Next Y16.78%
EPS Next 2Y9.31%
EPS Next 3Y8.66%
EPS Next 5Y9.35%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%8.47%
Revenue Next Year9.91%
Revenue Next 2Y6.24%
Revenue Next 3Y5.54%
Revenue Next 5Y5.35%
EBIT growth 1Y21.58%
EBIT growth 3Y14.18%
EBIT growth 5Y7.57%
EBIT Next Year36.14%
EBIT Next 3Y13.19%
EBIT Next 5Y13.76%
FCF growth 1Y33.72%
FCF growth 3Y4.49%
FCF growth 5Y3.96%
OCF growth 1Y37.07%
OCF growth 3Y5.34%
OCF growth 5Y5.28%
NOVARTIS AG-SPONSORED ADR / NVS FAQ
What is the ChartMill fundamental rating of NOVARTIS AG-SPONSORED ADR (NVS) stock?
ChartMill assigns a fundamental rating of 7 / 10 to NVS.
What is the valuation status for NVS stock?
ChartMill assigns a valuation rating of 7 / 10 to NOVARTIS AG-SPONSORED ADR (NVS). This can be considered as Undervalued.
How profitable is NOVARTIS AG-SPONSORED ADR (NVS) stock?
NOVARTIS AG-SPONSORED ADR (NVS) has a profitability rating of 9 / 10.
How financially healthy is NOVARTIS AG-SPONSORED ADR?
The financial health rating of NOVARTIS AG-SPONSORED ADR (NVS) is 7 / 10.
Is the dividend of NOVARTIS AG-SPONSORED ADR sustainable?
The dividend rating of NOVARTIS AG-SPONSORED ADR (NVS) is 7 / 10 and the dividend payout ratio is 54.32%.