NOVO-NORDISK A/S-SPONS ADR (NVO) Stock Fundamental Analysis
NYSE:NVO - New York Stock Exchange, Inc. - US6701002056 - ADR - Currency: USD
NVO gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 198 industry peers in the Pharmaceuticals industry. Both the health and profitability get an excellent rating, making NVO a very profitable company, without any liquidiy or solvency issues. NVO is growing strongly while it also seems undervalued. This is an interesting combination With these ratings, NVO could be worth investigating further 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.
In the past 5 years NVO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of NVO (21.68%) is better than 98.48% of its industry peers.
With an excellent Return On Equity value of 70.38%, NVO belongs to the best of the industry, outperforming 98.48% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 43.02%, NVO belongs to the top of the industry, outperforming 97.98% 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 41.67%.
The 3 year average ROIC (50.29%) for NVO is well above the current ROIC(43.02%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.68% | ||
| ROE | 70.38% | ||
| ROIC | 43.02% |
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
Looking at the Profit Margin, with a value of 34.78%, NVO belongs to the top of the industry, outperforming 96.97% of the companies in the same industry.
In the last couple of years the Profit Margin of NVO has grown nicely.
With an excellent Operating Margin value of 46.16%, NVO belongs to the best of the industry, outperforming 97.47% of the companies in the same industry.
In the last couple of years the Operating Margin of NVO has grown nicely.
NVO's Gross Margin of 84.67% is amongst the best of the industry. NVO outperforms 88.89% 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 | 46.16% | ||
| PM (TTM) | 34.78% | ||
| GM | 84.67% |
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
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 less shares outstanding than it did 1 year ago.
Compared to 5 years ago, NVO has more shares outstanding
Compared to 1 year ago, NVO has a worse debt to assets ratio.
2.2 Solvency
NVO has an Altman-Z score of 5.62. This indicates that NVO is financially healthy and has little risk of bankruptcy at the moment.
NVO has a better Altman-Z score (5.62) than 84.34% of its industry peers.
The Debt to FCF ratio of NVO is 1.48, which is an excellent value as it means it would take NVO, only 1.48 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.48, NVO belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
A Debt/Equity ratio of 0.62 indicates that NVO is somewhat dependend on debt financing.
The Debt to Equity ratio of NVO (0.62) is worse than 63.13% 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 | 0.62 | ||
| Debt/FCF | 1.48 | ||
| Altman-Z | 5.62 |
ROIC/WACC6.23
WACC6.9%
2.3 Liquidity
A Current Ratio of 0.74 indicates that NVO may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.74, NVO is doing worse than 88.38% of the companies in the same industry.
A Quick Ratio of 0.55 indicates that NVO may have some problems paying its short term obligations.
The Quick ratio of NVO (0.55) is worse than 89.39% 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 | 0.74 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.57% over the past year.
Measured over the past 5 years, NVO shows a small growth in Earnings Per Share. The EPS has been growing by 6.68% on average per year.
NVO shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.03%.
The Revenue has been growing by 18.94% on average over the past years. This is quite good.
EPS 1Y (TTM)21.57%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%29.12%
Revenue 1Y (TTM)25.03%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%30.09%
3.2 Future
The Earnings Per Share is expected to grow by 13.97% on average over the next years. This is quite good.
Based on estimates for the next years, NVO will show a quite strong growth in Revenue. The Revenue will grow by 12.68% on average per year.
EPS Next Y19.72%
EPS Next 2Y21.13%
EPS Next 3Y18.2%
EPS Next 5Y13.97%
Revenue Next Year21.03%
Revenue Next 2Y18.54%
Revenue Next 3Y15.89%
Revenue Next 5Y12.68%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.07 indicates a rather expensive valuation of NVO.
NVO's Price/Earnings ratio is rather cheap when compared to the industry. NVO is cheaper than 82.83% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.22. NVO is valued slightly cheaper when compared to this.
NVO is valuated correctly with a Price/Forward Earnings ratio of 16.76.
Based on the Price/Forward Earnings ratio, NVO is valued cheaper than 82.83% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NVO to the average of the S&P500 Index (20.86), we can say NVO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.07 | ||
| Fwd PE | 16.76 |
4.2 Price Multiples
NVO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NVO is cheaper than 81.31% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NVO indicates a rather cheap valuation: NVO is cheaper than 80.81% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.02 | ||
| EV/EBITDA | 13.63 |
4.3 Compensation for Growth
NVO's 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.
A more expensive valuation may be justified as NVO's earnings are expected to grow with 18.20% in the coming years.
PEG (NY)1.02
PEG (5Y)3
EPS Next 2Y21.13%
EPS Next 3Y18.2%
5. Dividend
5.1 Amount
NVO has a Yearly Dividend Yield of 2.57%. Purely for dividend investing, there may be better candidates out there.
NVO's Dividend Yield is rather good when compared to the industry average which is at 4.20. NVO pays more dividend than 92.42% of the companies in the same industry.
NVO's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
5.2 History
The dividend of NVO is nicely growing with an annual growth rate of 16.56%!
NVO has paid a dividend for at least 10 years, which is a reliable track record.
NVO has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)16.56%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
NVO pays out 43.71% of its income as dividend. 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.
DP43.71%
EPS Next 2Y21.13%
EPS Next 3Y18.2%
69.23
+3.63 (+5.53%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners37.62%
Inst Owner Change0.85%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap307.32B
Analysts74.38
Price Target113.73 (64.28%)
Short Float %0.46%
Short Ratio2.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
Yearly Dividend1.51
Dividend Growth(5Y)16.56%
DP43.71%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.05%
Min EPS beat(2)0.64%
Max EPS beat(2)7.46%
EPS beat(4)3
Avg EPS beat(4)2.73%
Min EPS beat(4)-4.65%
Max EPS beat(4)7.46%
EPS beat(8)6
Avg EPS beat(8)2.56%
EPS beat(12)9
Avg EPS beat(12)2.47%
EPS beat(16)13
Avg EPS beat(16)3.1%
Revenue beat(2)1
Avg Revenue beat(2)2.19%
Min Revenue beat(2)-2.57%
Max Revenue beat(2)6.95%
Revenue beat(4)2
Avg Revenue beat(4)1.23%
Min Revenue beat(4)-2.57%
Max Revenue beat(4)6.95%
Revenue beat(8)5
Avg Revenue beat(8)1.24%
Revenue beat(12)8
Avg Revenue beat(12)1.42%
Revenue beat(16)12
Avg Revenue beat(16)1.54%
PT rev (1m)-7.01%
PT rev (3m)-7.69%
EPS NQ rev (1m)-5.95%
EPS NQ rev (3m)-5.49%
EPS NY rev (1m)-2.08%
EPS NY rev (3m)-2.76%
Revenue NQ rev (1m)-1.75%
Revenue NQ rev (3m)-2.37%
Revenue NY rev (1m)-1.92%
Revenue NY rev (3m)-0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.07 | ||
| Fwd PE | 16.76 | ||
| P/S | 6.96 | ||
| P/FCF | 29.02 | ||
| P/OCF | 16.71 | ||
| P/B | 14.09 | ||
| P/tB | 62.4 | ||
| EV/EBITDA | 13.63 |
EPS(TTM)3.45
EY4.98%
EPS(NY)4.13
Fwd EY5.97%
FCF(TTM)2.39
FCFY3.45%
OCF(TTM)4.14
OCFY5.98%
SpS9.94
BVpS4.91
TBVpS1.11
PEG (NY)1.02
PEG (5Y)3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.68% | ||
| ROE | 70.38% | ||
| ROCE | 53.99% | ||
| ROIC | 43.02% | ||
| ROICexc | 48.11% | ||
| ROICexgc | 96.32% | ||
| OM | 46.16% | ||
| PM (TTM) | 34.78% | ||
| GM | 84.67% | ||
| FCFM | 23.99% |
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-Score5
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 1.48 | ||
| Debt/EBITDA | 0.59 | ||
| Cap/Depr | 268.54% | ||
| Cap/Sales | 17.67% | ||
| Interest Coverage | 219.02 | ||
| Cash Conversion | 78.99% | ||
| Profit Quality | 68.98% | ||
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.55 | ||
| Altman-Z | 5.62 |
F-Score5
WACC6.9%
ROIC/WACC6.23
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)21.57%
EPS 3Y2.95%
EPS 5Y6.68%
EPS Q2Q%29.12%
EPS Next Y19.72%
EPS Next 2Y21.13%
EPS Next 3Y18.2%
EPS Next 5Y13.97%
Revenue 1Y (TTM)25.03%
Revenue growth 3Y27.29%
Revenue growth 5Y18.94%
Sales Q2Q%30.09%
Revenue Next Year21.03%
Revenue Next 2Y18.54%
Revenue Next 3Y15.89%
Revenue Next 5Y12.68%
EBIT growth 1Y30.68%
EBIT growth 3Y32.76%
EBIT growth 5Y20.94%
EBIT Next Year40.14%
EBIT Next 3Y22.7%
EBIT Next 5Y15.67%
FCF growth 1Y-0.5%
FCF growth 3Y13.52%
FCF growth 5Y14.4%
OCF growth 1Y11.07%
OCF growth 3Y30.05%
OCF growth 5Y20.93%