NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
USA - NYSE:NVS - US66987V1098 - ADR
131.55 USD
+0.29 (+0.22%)
129.08 USD
-2.47 (-1.88%)
NVS gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 192 industry peers in the Pharmaceuticals industry. NVS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. NVS is valued quite cheap, while showing a decent growth score. This is a good combination! Finally NVS also has an excellent dividend rating. These ratings would make NVS suitable for value and dividend and quality investing!
1. Profitability
1.1 Basic Checks
NVS had positive earnings in the past year.
NVS had a positive operating cash flow in the past year.
Each year in the past 5 years NVS has been profitable.
Each year in the past 5 years NVS had a positive operating cash flow.
1.2 Ratios
NVS has a Return On Assets of 13.42%. This is amongst the best in the industry. NVS outperforms 94.79% of its industry peers.
Looking at the Return On Equity, with a value of 32.47%, NVS belongs to the top of the industry, outperforming 94.79% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 22.36%, NVS belongs to the top of the industry, outperforming 97.40% of the companies in the same industry.
NVS had an Average Return On Invested Capital over the past 3 years of 14.58%. This is in line with the industry average of 13.51%.
The last Return On Invested Capital (22.36%) for NVS is above the 3 year average (14.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 32.47% | ||
| ROIC | 22.36% |
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
1.3 Margins
NVS has a Profit Margin of 25.69%. This is amongst the best in the industry. NVS outperforms 92.71% of its industry peers.
In the last couple of years the Profit Margin of NVS has remained more or less at the same level.
NVS has a better Operating Margin (33.11%) than 94.79% of its industry peers.
In the last couple of years the Operating Margin of NVS has grown nicely.
NVS has a Gross Margin of 76.10%. This is amongst the best in the industry. NVS outperforms 81.77% of its industry peers.
NVS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.11% | ||
| PM (TTM) | 25.69% | ||
| GM | 76.1% |
OM growth 3Y8.17%
OM growth 5Y6.25%
PM growth 3Y-24.95%
PM growth 5Y-0.88%
GM growth 3Y0.5%
GM growth 5Y1.06%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NVS is creating value.
Compared to 1 year ago, NVS has less shares outstanding
NVS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for NVS is higher compared to a year ago.
2.2 Solvency
NVS has an Altman-Z score of 4.02. This indicates that NVS is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.02, NVS is in the better half of the industry, outperforming 74.48% of the companies in the same industry.
NVS has a debt to FCF ratio of 1.87. This is a very positive value and a sign of high solvency as it would only need 1.87 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.87, NVS belongs to the top of the industry, outperforming 93.23% of the companies in the same industry.
NVS has a Debt/Equity ratio of 0.55. This is a neutral value indicating NVS is somewhat dependend on debt financing.
NVS's Debt to Equity ratio of 0.55 is on the low side compared to the rest of the industry. NVS is outperformed by 64.58% of its industry peers.
Even though the debt/equity ratio score it not favorable for NVS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Altman-Z | 4.02 |
ROIC/WACC4.73
WACC4.73%
2.3 Liquidity
A Current Ratio of 0.88 indicates that NVS may have some problems paying its short term obligations.
NVS has a Current ratio of 0.88. This is amonst the worse of the industry: NVS underperforms 86.98% of its industry peers.
A Quick Ratio of 0.68 indicates that NVS may have some problems paying its short term obligations.
NVS's Quick ratio of 0.68 is on the low side compared to the rest of the industry. NVS is outperformed by 87.50% of its industry peers.
The current and quick ratio evaluation for NVS 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 | 0.88 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
NVS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.33%, which is quite impressive.
Measured over the past years, NVS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.14% on average per year.
NVS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.18%.
NVS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.24% yearly.
EPS 1Y (TTM)21.33%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%9.22%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%8.47%
3.2 Future
The Earnings Per Share is expected to grow by 9.60% on average over the next years. This is quite good.
Based on estimates for the next years, NVS will show a small growth in Revenue. The Revenue will grow by 5.42% on average per year.
EPS Next Y16.95%
EPS Next 2Y9.93%
EPS Next 3Y9.61%
EPS Next 5Y9.6%
Revenue Next Year9.97%
Revenue Next 2Y6.25%
Revenue Next 3Y5.34%
Revenue Next 5Y5.42%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.57, the valuation of NVS can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 86.46% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.56, NVS is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 13.79, the valuation of NVS can be described as correct.
NVS's Price/Forward Earnings ratio is rather cheap when compared to the industry. NVS is cheaper than 83.33% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NVS to the average of the S&P500 Index (34.62), we can say NVS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.57 | ||
| Fwd PE | 13.79 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NVS indicates a rather cheap valuation: NVS is cheaper than 84.38% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, NVS is valued cheaply inside the industry as 86.98% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.8 | ||
| EV/EBITDA | 11.46 |
4.3 Compensation for Growth
NVS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NVS has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.86
PEG (5Y)1.79
EPS Next 2Y9.93%
EPS Next 3Y9.61%
5. Dividend
5.1 Amount
NVS has a Yearly Dividend Yield of 3.31%. Purely for dividend investing, there may be better candidates out there.
NVS's Dividend Yield is rather good when compared to the industry average which is at 7.07. NVS pays more dividend than 94.27% of the companies in the same industry.
NVS's Dividend Yield is a higher than the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
5.2 History
The dividend of NVS has a limited annual growth rate of 5.49%.
NVS has paid a dividend for at least 10 years, which is a reliable track record.
NVS has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)5.49%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
NVS pays out 54.32% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NVS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP54.32%
EPS Next 2Y9.93%
EPS Next 3Y9.61%
131.55
+0.29 (+0.22%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners39.6%
Inst Owner Change0.37%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap252.42B
Revenue(TTM)56.02B
Net Income(TTM)14.39B
Analysts69.03
Price Target131.92 (0.28%)
Short Float %0.33%
Short Ratio3.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
Yearly Dividend3.79
Dividend Growth(5Y)5.49%
DP54.32%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.71%
Min EPS beat(2)-2.03%
Max EPS beat(2)0.61%
EPS beat(4)3
Avg EPS beat(4)2.81%
Min EPS beat(4)-2.03%
Max EPS beat(4)6.59%
EPS beat(8)6
Avg EPS beat(8)2.03%
EPS beat(12)10
Avg EPS beat(12)3.45%
EPS beat(16)11
Avg EPS beat(16)2.48%
Revenue beat(2)0
Avg Revenue beat(2)-2.83%
Min Revenue beat(2)-2.84%
Max Revenue beat(2)-2.82%
Revenue beat(4)1
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-2.84%
Max Revenue beat(4)0.78%
Revenue beat(8)2
Avg Revenue beat(8)-1.48%
Revenue beat(12)3
Avg Revenue beat(12)-3.77%
Revenue beat(16)4
Avg Revenue beat(16)-4.02%
PT rev (1m)0.28%
PT rev (3m)2.17%
EPS NQ rev (1m)-1.07%
EPS NQ rev (3m)0.58%
EPS NY rev (1m)0.52%
EPS NY rev (3m)4.91%
Revenue NQ rev (1m)-0.73%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)0.35%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.57 | ||
| Fwd PE | 13.79 | ||
| P/S | 4.51 | ||
| P/FCF | 14.8 | ||
| P/OCF | 11.98 | ||
| P/B | 5.69 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.46 |
EPS(TTM)9.03
EY6.86%
EPS(NY)9.54
Fwd EY7.25%
FCF(TTM)8.89
FCFY6.76%
OCF(TTM)10.98
OCFY8.35%
SpS29.2
BVpS23.1
TBVpS-5.35
PEG (NY)0.86
PEG (5Y)1.79
Graham Number68.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.42% | ||
| ROE | 32.47% | ||
| ROCE | 24.64% | ||
| ROIC | 22.36% | ||
| ROICexc | 25.65% | ||
| ROICexgc | 152.58% | ||
| OM | 33.11% | ||
| PM (TTM) | 25.69% | ||
| GM | 76.1% | ||
| FCFM | 30.45% |
ROA(3y)10.82%
ROA(5y)11.4%
ROE(3y)23.55%
ROE(5y)24.08%
ROIC(3y)14.58%
ROIC(5y)12.83%
ROICexc(3y)17.82%
ROICexc(5y)15.74%
ROICexgc(3y)90.48%
ROICexgc(5y)78.58%
ROCE(3y)16.96%
ROCE(5y)14.93%
ROICexgc growth 3Y14.29%
ROICexgc growth 5Y25.26%
ROICexc growth 3Y20.9%
ROICexc growth 5Y13.17%
OM growth 3Y8.17%
OM growth 5Y6.25%
PM growth 3Y-24.95%
PM growth 5Y-0.88%
GM growth 3Y0.5%
GM growth 5Y1.06%
F-Score7
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 1.87 | ||
| Debt/EBITDA | 1.01 | ||
| Cap/Depr | 74.31% | ||
| Cap/Sales | 7.16% | ||
| Interest Coverage | 18.85 | ||
| Cash Conversion | 87.98% | ||
| Profit Quality | 118.52% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z | 4.02 |
F-Score7
WACC4.73%
ROIC/WACC4.73
Cap/Depr(3y)51.13%
Cap/Depr(5y)48.4%
Cap/Sales(3y)6.48%
Cap/Sales(5y)6.27%
Profit Quality(3y)120.24%
Profit Quality(5y)109.63%
High Growth Momentum
Growth
EPS 1Y (TTM)21.33%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%9.22%
EPS Next Y16.95%
EPS Next 2Y9.93%
EPS Next 3Y9.61%
EPS Next 5Y9.6%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%8.47%
Revenue Next Year9.97%
Revenue Next 2Y6.25%
Revenue Next 3Y5.34%
Revenue Next 5Y5.42%
EBIT growth 1Y21.58%
EBIT growth 3Y14.18%
EBIT growth 5Y7.57%
EBIT Next Year34.89%
EBIT Next 3Y12.7%
EBIT Next 5Y12.44%
FCF growth 1Y33.72%
FCF growth 3Y4.49%
FCF growth 5Y3.96%
OCF growth 1Y37.07%
OCF growth 3Y5.34%
OCF growth 5Y5.28%
NOVARTIS AG-SPONSORED ADR / NVS FAQ
What is the ChartMill fundamental rating of NOVARTIS AG-SPONSORED ADR (NVS) stock?
ChartMill assigns a fundamental rating of 8 / 10 to NVS.
Can you provide the valuation status for NOVARTIS AG-SPONSORED ADR?
ChartMill assigns a valuation rating of 8 / 10 to NOVARTIS AG-SPONSORED ADR (NVS). This can be considered as Undervalued.
How profitable is NOVARTIS AG-SPONSORED ADR (NVS) stock?
NOVARTIS AG-SPONSORED ADR (NVS) has a profitability rating of 9 / 10.
What are the PE and PB ratios of NOVARTIS AG-SPONSORED ADR (NVS) stock?
The Price/Earnings (PE) ratio for NOVARTIS AG-SPONSORED ADR (NVS) is 14.57 and the Price/Book (PB) ratio is 5.69.
What is the earnings growth outlook for NOVARTIS AG-SPONSORED ADR?
The Earnings per Share (EPS) of NOVARTIS AG-SPONSORED ADR (NVS) is expected to grow by 16.95% in the next year.