NOVO-NORDISK A/S-SPONS ADR (NVO)
US6701002056 - ADR
Taking everything into account, NVO scores 7 out of 10 in our fundamental rating. NVO was compared to 198 industry peers in the Pharmaceuticals industry. NVO gets an excellent profitability rating and is at the same time showing great financial health properties. NVO is not overvalued while it is showing excellent growth. This is an interesting combination. Finally NVO also has an excellent dividend rating. These ratings could make NVO a good candidate for dividend and growth and quality investing.
1. Profitability
1.1 Basic Checks
NVO had positive earnings in the past year.
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
NVO's Return On Assets of 26.61% is amongst the best of the industry. NVO outperforms 98.46% of its industry peers.
The Return On Equity of NVO (78.53%) is better than 98.46% of its industry peers.
With an excellent Return On Invested Capital value of 56.78%, NVO belongs to the best of the industry, outperforming 99.49% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NVO is significantly above the industry average of 16.40%.
The last Return On Invested Capital (56.78%) for NVO is above the 3 year average (50.71%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.61% | ||
| ROE | 78.53% | ||
| ROIC | 56.78% |
ROA(3y)24.73%
ROA(5y)26.85%
ROE(3y)70.85%
ROE(5y)69.34%
ROIC(3y)50.71%
ROIC(5y)53.98%
1.3 Margins
The Profit Margin of NVO (36.03%) is better than 95.90% of its industry peers.
NVO's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 44.16%, NVO belongs to the top of the industry, outperforming 97.95% of the companies in the same industry.
NVO's Operating Margin has been stable in the last couple of years.
The Gross Margin of NVO (84.60%) is better than 87.18% 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 | 44.16% | ||
| PM (TTM) | 36.03% | ||
| GM | 84.6% |
OM growth 3Y1.58%
OM growth 5Y1.31%
PM growth 3Y2.77%
PM growth 5Y0.85%
GM growth 3Y0.43%
GM growth 5Y0.08%
2. Health
2.1 Basic Checks
NVO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NVO has more shares outstanding than it did 1 year ago.
The number of shares outstanding for NVO has been increased compared to 5 years ago.
Compared to 1 year ago, NVO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 13.54 indicates that NVO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 13.54, NVO belongs to the top of the industry, outperforming 90.77% 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.
The Debt to FCF ratio of NVO (0.39) is better than 96.41% of its industry peers.
NVO has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.19, NVO perfoms like the industry average, outperforming 45.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 0.39 | ||
| Altman-Z | 13.54 |
ROIC/WACC8.15
WACC6.97%
2.3 Liquidity
A Current Ratio of 0.82 indicates that NVO may have some problems paying its short term obligations.
NVO's Current ratio of 0.82 is on the low side compared to the rest of the industry. NVO is outperformed by 91.28% of its industry peers.
A Quick Ratio of 0.64 indicates that NVO may have some problems paying its short term obligations.
The Quick ratio of NVO (0.64) is worse than 89.23% 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 | 0.82 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
NVO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 52.33%, which is quite impressive.
NVO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.16% yearly.
Looking at the last year, NVO shows a very strong growth in Revenue. The Revenue has grown by 31.26%.
Measured over the past years, NVO shows a quite strong growth in Revenue. The Revenue has been growing by 15.74% on average per year.
EPS 1Y (TTM)52.33%
EPS 3Y1.11%
EPS 5Y3.16%
EPS growth Q2Q63.12%
Revenue 1Y (TTM)31.26%
Revenue growth 3Y22.31%
Revenue growth 5Y15.74%
Revenue growth Q2Q36.95%
3.2 Future
Based on estimates for the next years, NVO will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.23% on average per year.
NVO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.61% yearly.
EPS Next Y26.98%
EPS Next 2Y24.4%
EPS Next 3Y22.9%
EPS Next 5Y14.24%
Revenue Next Year25.89%
Revenue Next 2Y23.3%
Revenue Next 3Y21.15%
Revenue Next 5Y13.61%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
NVO is valuated quite expensively with a Price/Earnings ratio of 47.33.
Based on the Price/Earnings ratio, NVO is valued cheaper than 80.51% of the companies in the same industry.
NVO's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.92.
NVO is valuated quite expensively with a Price/Forward Earnings ratio of 37.25.
78.46% of the companies in the same industry are more expensive than NVO, based on the Price/Forward Earnings ratio.
NVO is valuated expensively when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.33 | ||
| Fwd PE | 37.25 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NVO is valued a bit cheaper than 77.44% of the companies in the same industry.
78.46% 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 | 56.26 | ||
| EV/EBITDA | 35.01 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
NVO has an outstanding profitability rating, which may justify a higher PE ratio.
NVO's earnings are expected to grow with 22.90% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.75
PEG (5Y)14.96
EPS Next 2Y24.4%
EPS Next 3Y22.9%
5. Dividend
5.1 Amount
NVO has a Yearly Dividend Yield of 1.08%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.39, NVO pays a better dividend. On top of this NVO pays more dividend than 90.77% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, NVO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
5.2 History
On average, the dividend of NVO grows each year by 11.24%, 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)11.24%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
NVO pays out 37.96% of its income as dividend. This is a sustainable payout ratio.
NVO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.96%
EPS Next 2Y24.4%
EPS Next 3Y22.9%
NOVO-NORDISK A/S-SPONS ADR
NYSE:NVO (4/26/2024, 7:07:16 PM)
After market: 127.3 +0.45 (+0.35%)126.85
+1.06 (+0.84%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
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Market Cap565.95B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.33 | ||
| Fwd PE | 37.25 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
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PEG (NY)1.75
PEG (5Y)14.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 26.61% | ||
| ROE | 78.53% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 44.16% | ||
| PM (TTM) | 36.03% | ||
| GM | 84.6% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
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ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
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PM growth 5Y
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GM growth 5Y
F-Score
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
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Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)52.33%
EPS 3Y1.11%
EPS 5Y
EPS growth Q2Q
EPS Next Y26.98%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)31.26%
Revenue growth 3Y22.31%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
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