NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NVS - US66987V1098 - ADR
141.46 USD
-0.52 (-0.37%)
144 USD
+2.54 (+1.8%)
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 may be a bit undervalued, certainly considering the very reasonable score on growth Finally NVS also has an excellent dividend rating. With these ratings, NVS could be worth investigating further 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.
NVS had positive earnings in each of the past 5 years.
NVS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NVS has a Return On Assets of 13.42%. This is amongst the best in the industry. NVS outperforms 94.24% of its industry peers.
With an excellent Return On Equity value of 32.47%, NVS belongs to the best of the industry, outperforming 94.24% of the companies in the same industry.
NVS has a Return On Invested Capital of 22.36%. This is amongst the best in the industry. NVS outperforms 97.38% of its industry peers.
NVS had an Average Return On Invested Capital over the past 3 years of 14.58%. This 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's Profit Margin of 25.69% is amongst the best of the industry. NVS outperforms 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.
Looking at the Operating Margin, with a value of 33.11%, NVS belongs to the top of the industry, outperforming 94.76% of the companies in the same industry.
In the last couple of years the Operating Margin of NVS has grown nicely.
NVS has a Gross Margin of 76.10%. This is amongst the best in the industry. NVS outperforms 82.20% of its industry peers.
In the last couple of years the Gross Margin of NVS has remained more or less at the same level.
| 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.
Compared to 1 year ago, NVS has less shares outstanding
The number of shares outstanding for NVS has been reduced compared to 5 years ago.
Compared to 1 year ago, NVS has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.22 indicates that NVS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.22, NVS is in the better half of the industry, outperforming 70.16% of the companies in the same industry.
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.
The Debt to FCF ratio of NVS (1.87) is better than 94.24% of its industry peers.
A Debt/Equity ratio of 0.55 indicates that NVS is somewhat dependend on debt financing.
NVS has a worse Debt to Equity ratio (0.55) than 65.44% of its industry peers.
Even though the debt/equity ratio score it not favorable for NVS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Altman-Z | 4.22 |
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.
Looking at the Current ratio, with a value of 0.88, NVS is doing worse than 86.91% of the companies in the same industry.
A Quick Ratio of 0.68 indicates that NVS may have some problems paying its short term obligations.
NVS has a worse Quick ratio (0.68) than 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.
NVS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.14% yearly.
The Revenue has grown by 12.18% in the past year. This is quite good.
NVS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.24% yearly.
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
The Earnings Per Share is expected to grow by 9.35% on average over the next years. This is quite good.
Based on estimates for the next years, NVS will show a small growth in Revenue. The Revenue will grow by 5.35% on average per year.
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
The EPS growth rate is stable: in the next years the growth will be about the same 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.67, which indicates a correct valuation of NVS.
Based on the Price/Earnings ratio, NVS is valued cheaper than 85.34% of the companies in the same industry.
When comparing the Price/Earnings ratio of NVS to the average of the S&P500 Index (27.00), we can say NVS is valued slightly cheaper.
NVS is valuated correctly with a Price/Forward Earnings ratio of 14.99.
Based on the Price/Forward Earnings ratio, NVS is valued cheaply inside the industry as 82.20% of the companies are valued more expensively.
NVS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.67 | ||
| Fwd PE | 14.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NVS is valued cheaply inside the industry as 84.29% of the companies are valued more expensively.
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 | 15.91 | ||
| EV/EBITDA | 12.3 |
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.
NVS has an outstanding profitability rating, which 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
NVS has a Yearly Dividend Yield of 3.19%.
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.
Compared to an average S&P500 Dividend Yield of 1.94, NVS pays a better dividend.
| 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%
141.46
-0.52 (-0.37%)
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 Cap271.43B
Revenue(TTM)56.02B
Net Income(TTM)14.39B
Analysts70.32
Price Target135.04 (-4.54%)
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 | 14.99 | ||
| P/S | 4.84 | ||
| P/FCF | 15.91 | ||
| P/OCF | 12.88 | ||
| P/B | 6.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.3 |
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 | 4.22 |
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%.