NOVARTIS AG-SPONSORED ADR (NVS) Stock Fundamental Analysis
USA - NYSE:NVS - US66987V1098 - ADR
131.43 USD
+0.66 (+0.5%)
131.43 USD
0 (0%)
Overall NVS gets a fundamental rating of 7 out of 10. We evaluated NVS against 195 industry peers in the Pharmaceuticals industry. NVS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NVS is valued quite cheap, while showing a decent growth score. This is a good combination! Finally NVS also has an excellent dividend rating. This makes NVS very considerable 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
The Return On Assets of NVS (13.08%) is better than 94.36% of its industry peers.
NVS's Return On Equity of 32.52% is amongst the best of the industry. NVS outperforms 95.90% of its industry peers.
NVS has a Return On Invested Capital of 22.91%. This is amongst the best in the industry. NVS outperforms 96.92% of its industry peers.
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 15.30%.
The last Return On Invested Capital (22.91%) for NVS is above the 3 year average (14.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.08% | ||
| ROE | 32.52% | ||
| ROIC | 22.91% |
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's Profit Margin of 24.90% is amongst the best of the industry. NVS outperforms 94.87% 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's Operating Margin of 33.45% is amongst the best of the industry. NVS outperforms 95.38% of its industry peers.
In the last couple of years the Operating Margin of NVS has grown nicely.
NVS's Gross Margin of 76.12% is amongst the best of the industry. NVS outperforms 82.56% of its industry peers.
In the last couple of years the Gross Margin of NVS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.45% | ||
| PM (TTM) | 24.9% | ||
| GM | 76.12% |
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
NVS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NVS has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, NVS has less shares outstanding
The debt/assets ratio for NVS is higher compared to a year ago.
2.2 Solvency
NVS has an Altman-Z score of 4.04. 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 4.04, NVS is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
NVS has a debt to FCF ratio of 1.93. This is a very positive value and a sign of high solvency as it would only need 1.93 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.93, NVS belongs to the top of the industry, outperforming 93.85% of the companies in the same industry.
A Debt/Equity ratio of 0.57 indicates that NVS is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.57, NVS is doing worse than 63.59% of the companies in the same industry.
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 | 0.57 | ||
| Debt/FCF | 1.93 | ||
| Altman-Z | 4.04 |
ROIC/WACC4.79
WACC4.78%
2.3 Liquidity
A Current Ratio of 0.82 indicates that NVS may have some problems paying its short term obligations.
The Current ratio of NVS (0.82) is worse than 87.18% of its industry peers.
NVS has a Quick Ratio of 0.82. This is a bad value and indicates that NVS is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.62, NVS is not doing good in the industry: 86.15% of the companies in the same industry are doing better.
NVS 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 | 0.62 |
3. Growth
3.1 Past
NVS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.58%, 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.
The Revenue has grown by 12.24% in the past year. This is quite good.
Measured over the past years, NVS shows a small growth in Revenue. The Revenue has been growing by 1.24% on average per year.
EPS 1Y (TTM)22.58%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%22.84%
Revenue 1Y (TTM)12.24%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%12.32%
3.2 Future
Based on estimates for the next years, NVS will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.01% on average per year.
The Revenue is expected to grow by 4.80% on average over the next years.
EPS Next Y16.18%
EPS Next 2Y9.92%
EPS Next 3Y9.34%
EPS Next 5Y8.01%
Revenue Next Year9.59%
Revenue Next 2Y6.01%
Revenue Next 3Y5%
Revenue Next 5Y4.8%
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 14.85, 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 86.15% of the companies listed in the same industry.
NVS's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.40.
Based on the Price/Forward Earnings ratio of 13.76, the valuation of NVS can be described as correct.
Based on the Price/Forward Earnings ratio, NVS is valued cheaply inside the industry as 82.56% of the companies are valued more expensively.
NVS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.85 | ||
| Fwd PE | 13.76 |
4.2 Price Multiples
NVS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NVS is cheaper than 86.67% of the companies in the same industry.
86.67% of the companies in the same industry are more expensive than NVS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.14 | ||
| EV/EBITDA | 11.5 |
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.
The excellent profitability rating of NVS may justify a higher PE ratio.
PEG (NY)0.92
PEG (5Y)1.82
EPS Next 2Y9.92%
EPS Next 3Y9.34%
5. Dividend
5.1 Amount
NVS has a Yearly Dividend Yield of 3.35%.
NVS's Dividend Yield is rather good when compared to the industry average which is at 7.14. NVS pays more dividend than 94.87% of the companies in the same industry.
NVS's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.35% |
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 57.26% of its income as dividend. This is a bit on the high side, but may be sustainable.
NVS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP57.26%
EPS Next 2Y9.92%
EPS Next 3Y9.34%
131.43
+0.66 (+0.5%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners39.6%
Inst Owner Change-0.01%
Ins Owners0.01%
Ins Owner ChangeN/A
Market Cap254.43B
Analysts68.75
Price Target131.54 (0.08%)
Short Float %0.24%
Short Ratio3.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.35% |
Yearly Dividend3.79
Dividend Growth(5Y)5.49%
DP57.26%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.6%
Min EPS beat(2)0.61%
Max EPS beat(2)6.59%
EPS beat(4)4
Avg EPS beat(4)4.26%
Min EPS beat(4)0.61%
Max EPS beat(4)6.59%
EPS beat(8)7
Avg EPS beat(8)2.76%
EPS beat(12)10
Avg EPS beat(12)3.62%
EPS beat(16)12
Avg EPS beat(16)2.73%
Revenue beat(2)0
Avg Revenue beat(2)-1.98%
Min Revenue beat(2)-2.84%
Max Revenue beat(2)-1.13%
Revenue beat(4)1
Avg Revenue beat(4)-1.13%
Min Revenue beat(4)-2.84%
Max Revenue beat(4)0.78%
Revenue beat(8)2
Avg Revenue beat(8)-1.36%
Revenue beat(12)3
Avg Revenue beat(12)-5.01%
Revenue beat(16)5
Avg Revenue beat(16)-3.81%
PT rev (1m)-2.73%
PT rev (3m)1.29%
EPS NQ rev (1m)0.7%
EPS NQ rev (3m)5.44%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)5.47%
Revenue NQ rev (1m)1.38%
Revenue NQ rev (3m)3.5%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)1.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.85 | ||
| Fwd PE | 13.76 | ||
| P/S | 4.64 | ||
| P/FCF | 15.14 | ||
| P/OCF | 12.24 | ||
| P/B | 6.06 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.5 |
EPS(TTM)8.85
EY6.73%
EPS(NY)9.55
Fwd EY7.27%
FCF(TTM)8.68
FCFY6.61%
OCF(TTM)10.74
OCFY8.17%
SpS28.33
BVpS21.69
TBVpS-6.62
PEG (NY)0.92
PEG (5Y)1.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.08% | ||
| ROE | 32.52% | ||
| ROCE | 25.24% | ||
| ROIC | 22.91% | ||
| ROICexc | 25.24% | ||
| ROICexgc | 149.23% | ||
| OM | 33.45% | ||
| PM (TTM) | 24.9% | ||
| GM | 76.12% | ||
| FCFM | 30.64% |
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%
ROICexcg growth 3Y14.29%
ROICexcg 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-Score6
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.57 | ||
| Debt/FCF | 1.93 | ||
| Debt/EBITDA | 0.99 | ||
| Cap/Depr | 66.33% | ||
| Cap/Sales | 7.26% | ||
| Interest Coverage | 19.66 | ||
| Cash Conversion | 85.38% | ||
| Profit Quality | 123.09% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 4.04 |
F-Score6
WACC4.78%
ROIC/WACC4.79
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)22.58%
EPS 3Y7.48%
EPS 5Y8.14%
EPS Q2Q%22.84%
EPS Next Y16.18%
EPS Next 2Y9.92%
EPS Next 3Y9.34%
EPS Next 5Y8.01%
Revenue 1Y (TTM)12.24%
Revenue growth 3Y5.56%
Revenue growth 5Y1.24%
Sales Q2Q%12.32%
Revenue Next Year9.59%
Revenue Next 2Y6.01%
Revenue Next 3Y5%
Revenue Next 5Y4.8%
EBIT growth 1Y44.75%
EBIT growth 3Y14.18%
EBIT growth 5Y7.57%
EBIT Next Year34.89%
EBIT Next 3Y12.7%
EBIT Next 5Y11.36%
FCF growth 1Y32.64%
FCF growth 3Y4.49%
FCF growth 5Y3.96%
OCF growth 1Y35.29%
OCF growth 3Y5.34%
OCF growth 5Y5.28%