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Is NYSE:NVO a Good Fit for Dividend Investing?

By Mill Chart

Last update: Apr 9, 2024

Our stock screener has singled out NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO) as a promising choice for dividend investors. NYSE:NVO not only scores well in profitability, solvency, and liquidity but also offers a decent dividend. We'll explore this further.

Unpacking NYSE:NVO's Dividend Rating

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. NYSE:NVO earns a 7 out of 10:

  • NVO's Dividend Yield is rather good when compared to the industry average which is at 4.28. NVO pays more dividend than 91.46% of the companies in the same industry.
  • The dividend of NVO is nicely growing with an annual growth rate of 11.24%!
  • NVO has been paying a dividend for at least 10 years, so it has a reliable track record.
  • NVO has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
  • 37.96% of the earnings are spent on dividend by NVO. This is a low number and sustainable payout ratio.
  • The dividend of NVO is growing, but earnings are growing more, so the dividend growth is sustainable.

Deciphering NYSE:NVO's Health Rating

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:NVO, the assigned 7 reflects its health status:

  • NVO has an Altman-Z score of 13.48. This indicates that NVO is financially healthy and has little risk of bankruptcy at the moment.
  • With an excellent Altman-Z score value of 13.48, NVO belongs to the best of the industry, outperforming 89.95% of the companies in the same industry.
  • NVO has a debt to FCF ratio of 0.39. This is a very positive value and a sign of high solvency as it would only need 0.39 years to pay back of all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 0.39, NVO belongs to the top of the industry, outperforming 96.48% of the companies in the same industry.
  • A Debt/Equity ratio of 0.19 indicates that NVO is not too dependend on debt financing.
  • 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.

Analyzing Profitability Metrics

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:NVO, the assigned 9 is noteworthy for profitability:

  • Looking at the Return On Assets, with a value of 26.61%, NVO belongs to the top of the industry, outperforming 98.49% of the companies in the same industry.
  • NVO has a Return On Equity of 78.53%. This is amongst the best in the industry. NVO outperforms 98.49% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 56.78%, NVO belongs to the top of the industry, outperforming 99.50% of the companies in the same industry.
  • NVO had an Average Return On Invested Capital over the past 3 years of 50.71%. This is significantly above the industry average of 13.09%.
  • The 3 year average ROIC (50.71%) for NVO is below the current ROIC(56.78%), indicating increased profibility in the last year.
  • NVO has a Profit Margin of 36.03%. This is amongst the best in the industry. NVO outperforms 96.48% of its industry peers.
  • With an excellent Operating Margin value of 44.16%, NVO belongs to the best of the industry, outperforming 98.49% of the companies in the same industry.
  • NVO has a better Gross Margin (84.60%) than 87.44% of its industry peers.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

Our latest full fundamental report of NVO contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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NOVO-NORDISK A/S-SPONS ADR

NYSE:NVO (5/21/2024, 7:04:00 PM)

After market: 135.4 +0.24 (+0.18%)

135.16

+2.25 (+1.69%)

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