NOVO NORDISK A/S-B (NOV.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:NOV - DK0062498333 - Common Stock
50.9 EUR
-1.74 (-3.31%)
Overall NOV gets a fundamental rating of 6 out of 10. We evaluated NOV against 55 industry peers in the Pharmaceuticals industry. While NOV has a great profitability rating, there are some minor concerns on its financial health. NOV is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- NOV had positive earnings in the past year.
- In the past year NOV had a positive cash flow from operations.
- In the past 5 years NOV has always been profitable.
- In the past 5 years NOV always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 20.26%, NOV belongs to the top of the industry, outperforming 98.18% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 61.08%, NOV belongs to the top of the industry, outperforming 94.55% of the companies in the same industry.
- NOV has a better Return On Invested Capital (38.03%) than 98.18% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for NOV is significantly above the industry average of 14.00%.
- The last Return On Invested Capital (38.03%) for NOV is well below the 3 year average (50.29%), which needs to be investigated, but indicates that NOV had better years and this may not be a problem.
| 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
- NOV's Profit Margin of 32.88% is amongst the best of the industry. NOV outperforms 100.00% of its industry peers.
- In the last couple of years the Profit Margin of NOV has grown nicely.
- Looking at the Operating Margin, with a value of 42.03%, NOV belongs to the top of the industry, outperforming 94.55% of the companies in the same industry.
- In the last couple of years the Operating Margin of NOV has grown nicely.
- Looking at the Gross Margin, with a value of 82.05%, NOV belongs to the top of the industry, outperforming 85.45% of the companies in the same industry.
- In the last couple of years the Gross Margin of NOV 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
- NOV has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- NOV has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for NOV has been increased compared to 5 years ago.
- Compared to 1 year ago, NOV has a worse debt to assets ratio.
2.2 Solvency
- NOV has an Altman-Z score of 4.77. This indicates that NOV is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 4.77, NOV is in the better half of the industry, outperforming 67.27% of the companies in the same industry.
- The Debt to FCF ratio of NOV is 1.66, which is an excellent value as it means it would take NOV, only 1.66 years of fcf income to pay off all of its debts.
- NOV has a better Debt to FCF ratio (1.66) than 89.09% of its industry peers.
- A Debt/Equity ratio of 0.52 indicates that NOV is somewhat dependend on debt financing.
- The Debt to Equity ratio of NOV (0.52) is better than 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.66 | ||
| Altman-Z | 4.77 |
ROIC/WACC6.07
WACC6.27%
2.3 Liquidity
- A Current Ratio of 0.78 indicates that NOV may have some problems paying its short term obligations.
- The Current ratio of NOV (0.78) is worse than 85.45% of its industry peers.
- A Quick Ratio of 0.57 indicates that NOV may have some problems paying its short term obligations.
- NOV has a worse Quick ratio (0.57) than 80.00% of its industry peers.
- NOV 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
- NOV 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 by 22.54% on average over the past years. This is a very strong growth
- 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 3Y29.71%
EPS 5Y22.54%
EPS Q2Q%-26.47%
Revenue 1Y (TTM)16.64%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%5.14%
3.2 Future
- The Earnings Per Share is expected to grow by 5.49% on average over the next years.
- Based on estimates for the next years, NOV will show a small growth in Revenue. The Revenue will grow by 6.10% on average per year.
EPS Next Y4.45%
EPS Next 2Y0.33%
EPS Next 3Y2.25%
EPS Next 5Y5.49%
Revenue Next Year7.98%
Revenue Next 2Y4.04%
Revenue Next 3Y4.95%
Revenue Next 5Y6.1%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less 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
- A Price/Earnings ratio of 16.31 indicates a correct valuation of NOV.
- Based on the Price/Earnings ratio, NOV is valued a bit cheaper than the industry average as 69.09% of the companies are valued more expensively.
- NOV is valuated rather cheaply when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 16.68, NOV is valued correctly.
- NOV's Price/Forward Earnings ratio is in line with the industry average.
- When comparing the Price/Forward Earnings ratio of NOV to the average of the S&P500 Index (25.83), we can say NOV is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.31 | ||
| Fwd PE | 16.68 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NOV indicates a somewhat cheap valuation: NOV is cheaper than 63.64% of the companies listed in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as NOV.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.71 | ||
| EV/EBITDA | 11.39 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NOV does not grow enough to justify the current Price/Earnings ratio.
- The excellent profitability rating of NOV may justify a higher PE ratio.
PEG (NY)3.67
PEG (5Y)0.72
EPS Next 2Y0.33%
EPS Next 3Y2.25%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.94%, NOV has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 1.62, NOV pays a bit more dividend than its industry peers.
- NOV's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
5.2 History
- On average, the dividend of NOV grows each year by 16.56%, which is quite nice.
Dividend Growth(5Y)16.56%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- NOV pays out 49.88% of its income as dividend. This is a bit on the high side, but may be sustainable.
- NOV's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP49.88%
EPS Next 2Y0.33%
EPS Next 3Y2.25%
NOVO NORDISK A/S-B / NOV.DE FAQ
What is the fundamental rating for NOV stock?
ChartMill assigns a fundamental rating of 6 / 10 to NOV.DE.
Can you provide the valuation status for NOVO NORDISK A/S-B?
ChartMill assigns a valuation rating of 4 / 10 to NOVO NORDISK A/S-B (NOV.DE). This can be considered as Fairly Valued.
What is the profitability of NOV stock?
NOVO NORDISK A/S-B (NOV.DE) has a profitability rating of 9 / 10.
Can you provide the expected EPS growth for NOV stock?
The Earnings per Share (EPS) of NOVO NORDISK A/S-B (NOV.DE) is expected to grow by 4.45% in the next year.
Is the dividend of NOVO NORDISK A/S-B sustainable?
The dividend rating of NOVO NORDISK A/S-B (NOV.DE) is 6 / 10 and the dividend payout ratio is 49.88%.