NOVO-NORDISK A/S-SPONS ADR (NVO) Stock Fundamental Analysis
USA - NYSE:NVO - US6701002056 - ADR
59.65 USD
+0.02 (+0.03%)
59.99 USD
+0.34 (+0.57%)
Overall NVO gets a fundamental rating of 8 out of 10. We evaluated NVO against 196 industry peers in the Pharmaceuticals industry. NVO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NVO has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination! These ratings could make NVO a good candidate for value and growth and quality investing.
1. Profitability
1.1 Basic Checks
NVO had positive earnings in the past year.
In the past year NVO had a positive cash flow from operations.
In the past 5 years NVO has always been profitable.
NVO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NVO has a better Return On Assets (23.04%) than 97.96% of its industry peers.
Looking at the Return On Equity, with a value of 66.09%, NVO belongs to the top of the industry, outperforming 98.47% of the companies in the same industry.
With an excellent Return On Invested Capital value of 41.43%, NVO belongs to the best of the industry, outperforming 98.98% of the companies in the same industry.
NVO had an Average Return On Invested Capital over the past 3 years of 50.29%. This is significantly above the industry average of 15.30%.
The 3 year average ROIC (50.29%) for NVO is well above the current ROIC(41.43%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.04% | ||
| ROE | 66.09% | ||
| ROIC | 41.43% |
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
NVO's Profit Margin of 35.61% is amongst the best of the industry. NVO outperforms 97.45% of its industry peers.
In the last couple of years the Profit Margin of NVO has grown nicely.
NVO has a Operating Margin of 45.78%. This is amongst the best in the industry. NVO outperforms 98.47% of its industry peers.
NVO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 83.95%, NVO belongs to the top of the industry, outperforming 87.76% of the companies in the same industry.
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 | 45.78% | ||
| PM (TTM) | 35.61% | ||
| GM | 83.95% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NVO is creating value.
The number of shares outstanding for NVO has been reduced compared to 1 year ago.
NVO has more shares outstanding than it did 5 years ago.
The debt/assets ratio for NVO is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.22 indicates that NVO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.22, NVO belongs to the top of the industry, outperforming 80.10% of the companies in the same industry.
NVO has a debt to FCF ratio of 1.61. This is a very positive value and a sign of high solvency as it would only need 1.61 years to pay back of all of its debts.
NVO has a Debt to FCF ratio of 1.61. This is amongst the best in the industry. NVO outperforms 94.39% of its industry peers.
NVO has a Debt/Equity ratio of 0.52. This is a neutral value indicating NVO is somewhat dependend on debt financing.
The Debt to Equity ratio of NVO (0.52) is worse than 61.22% of its industry peers.
Even though the debt/equity ratio score it not favorable for NVO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.61 | ||
| Altman-Z | 5.22 |
ROIC/WACC7.17
WACC5.78%
2.3 Liquidity
A Current Ratio of 0.78 indicates that NVO may have some problems paying its short term obligations.
NVO's Current ratio of 0.78 is on the low side compared to the rest of the industry. NVO is outperformed by 88.27% of its industry peers.
NVO has a Quick Ratio of 0.78. This is a bad value and indicates that NVO is not financially healthy enough and could expect problems in meeting its short term obligations.
NVO's Quick ratio of 0.56 is on the low side compared to the rest of the industry. NVO is outperformed by 90.31% of its industry peers.
The current and quick ratio evaluation for NVO is rather negative, while it does have 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 | 0.56 |
3. Growth
3.1 Past
NVO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.25%, which is quite impressive.
The Earnings Per Share has been growing slightly by 6.68% on average over the past years.
Looking at the last year, NVO shows a very strong growth in Revenue. The Revenue has grown by 20.90%.
Measured over the past years, NVO shows a quite strong growth in Revenue. The Revenue has been growing by 18.94% on average per year.
EPS 1Y (TTM)24.25%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%32.74%
Revenue 1Y (TTM)20.9%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%12.93%
3.2 Future
The Earnings Per Share is expected to grow by 9.00% on average over the next years. This is quite good.
NVO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.45% yearly.
EPS Next Y9.19%
EPS Next 2Y8.94%
EPS Next 3Y9.11%
EPS Next 5Y9%
Revenue Next Year10.32%
Revenue Next 2Y8.85%
Revenue Next 3Y8.6%
Revenue Next 5Y8.45%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
NVO is valuated correctly with a Price/Earnings ratio of 15.22.
Based on the Price/Earnings ratio, NVO is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
NVO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.90, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 14.12, the valuation of NVO can be described as correct.
Based on the Price/Forward Earnings ratio, NVO is valued cheaply inside the industry as 81.12% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 23.36. NVO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.22 | ||
| Fwd PE | 14.12 |
4.2 Price Multiples
NVO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NVO is cheaper than 88.27% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NVO is valued cheaply inside the industry as 82.14% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.38 | ||
| EV/EBITDA | 11.12 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of NVO may justify a higher PE ratio.
PEG (NY)1.66
PEG (5Y)2.28
EPS Next 2Y8.94%
EPS Next 3Y9.11%
5. Dividend
5.1 Amount
NVO has a Yearly Dividend Yield of 3.14%.
NVO's Dividend Yield is rather good when compared to the industry average which is at 6.27. NVO pays more dividend than 93.37% of the companies in the same industry.
NVO's Dividend Yield is a higher than the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.14% |
5.2 History
On average, the dividend of NVO grows each year by 16.56%, which is quite nice.
NVO has been paying a dividend for at least 10 years, so it has 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)16.56%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
45.63% of the earnings are spent on dividend by NVO. This is a bit on the high side, but may be sustainable.
NVO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP45.63%
EPS Next 2Y8.94%
EPS Next 3Y9.11%
59.65
+0.02 (+0.03%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners36.01%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap265.05B
Analysts73.33
Price Target76.58 (28.38%)
Short Float %0.69%
Short Ratio1.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.14% |
Yearly Dividend1.56
Dividend Growth(5Y)16.56%
DP45.63%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.4%
Min EPS beat(2)-1.15%
Max EPS beat(2)3.94%
EPS beat(4)3
Avg EPS beat(4)2.73%
Min EPS beat(4)-1.15%
Max EPS beat(4)7.46%
EPS beat(8)6
Avg EPS beat(8)3.48%
EPS beat(12)9
Avg EPS beat(12)2.29%
EPS beat(16)12
Avg EPS beat(16)2.31%
Revenue beat(2)0
Avg Revenue beat(2)-0.85%
Min Revenue beat(2)-1.11%
Max Revenue beat(2)-0.6%
Revenue beat(4)1
Avg Revenue beat(4)0.67%
Min Revenue beat(4)-2.57%
Max Revenue beat(4)6.95%
Revenue beat(8)4
Avg Revenue beat(8)1.2%
Revenue beat(12)7
Avg Revenue beat(12)0.86%
Revenue beat(16)10
Avg Revenue beat(16)1.1%
PT rev (1m)-6.16%
PT rev (3m)-25.09%
EPS NQ rev (1m)-3.26%
EPS NQ rev (3m)-10.17%
EPS NY rev (1m)-2.05%
EPS NY rev (3m)-8.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-6.1%
Revenue NY rev (1m)-0.39%
Revenue NY rev (3m)-7.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.22 | ||
| Fwd PE | 14.12 | ||
| P/S | 5.41 | ||
| P/FCF | 27.38 | ||
| P/OCF | 13.88 | ||
| P/B | 10.04 | ||
| P/tB | 28.02 | ||
| EV/EBITDA | 11.12 |
EPS(TTM)3.92
EY6.57%
EPS(NY)4.22
Fwd EY7.08%
FCF(TTM)2.18
FCFY3.65%
OCF(TTM)4.3
OCFY7.21%
SpS11.03
BVpS5.94
TBVpS2.13
PEG (NY)1.66
PEG (5Y)2.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 23.04% | ||
| ROE | 66.09% | ||
| ROCE | 52% | ||
| ROIC | 41.43% | ||
| ROICexc | 44.49% | ||
| ROICexgc | 76.96% | ||
| OM | 45.78% | ||
| PM (TTM) | 35.61% | ||
| GM | 83.95% | ||
| FCFM | 19.75% |
ROA(3y)23.77%
ROA(5y)24.99%
ROE(3y)71.81%
ROE(5y)69.89%
ROIC(3y)50.29%
ROIC(5y)49.64%
ROICexc(3y)60.7%
ROICexc(5y)59.32%
ROICexgc(3y)124.92%
ROICexgc(5y)112.44%
ROCE(3y)63.71%
ROCE(5y)65.35%
ROICexcg growth 3Y-1.28%
ROICexcg growth 5Y0.46%
ROICexc growth 3Y-2.16%
ROICexc growth 5Y-9.95%
OM growth 3Y4.3%
OM growth 5Y1.69%
PM growth 3Y0.84%
PM growth 5Y1.73%
GM growth 3Y0.72%
GM growth 5Y0.24%
F-Score4
Asset Turnover0.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.61 | ||
| Debt/EBITDA | 0.55 | ||
| Cap/Depr | 374.26% | ||
| Cap/Sales | 19.21% | ||
| Interest Coverage | 60.84 | ||
| Cash Conversion | 76.52% | ||
| Profit Quality | 55.47% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 5.22 |
F-Score4
WACC5.78%
ROIC/WACC7.17
Cap/Depr(3y)294.05%
Cap/Depr(5y)277.71%
Cap/Sales(3y)14.25%
Cap/Sales(5y)13.08%
Profit Quality(3y)89.38%
Profit Quality(5y)87.75%
High Growth Momentum
Growth
EPS 1Y (TTM)24.25%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%32.74%
EPS Next Y9.19%
EPS Next 2Y8.94%
EPS Next 3Y9.11%
EPS Next 5Y9%
Revenue 1Y (TTM)20.9%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%12.93%
Revenue Next Year10.32%
Revenue Next 2Y8.85%
Revenue Next 3Y8.6%
Revenue Next 5Y8.45%
EBIT growth 1Y21.88%
EBIT growth 3Y32.76%
EBIT growth 5Y20.94%
EBIT Next Year21.98%
EBIT Next 3Y13.55%
EBIT Next 5Y10.24%
FCF growth 1Y-8.73%
FCF growth 3Y13.52%
FCF growth 5Y14.4%
OCF growth 1Y35.43%
OCF growth 3Y30.05%
OCF growth 5Y20.93%