Novo Nordisk's Long-Term Investment Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: NASDAQ.COM
- Recurring Revenue Stream: As one of the world's largest insulin producers, Novo Nordisk benefits from a steady revenue stream due to the regular need for insulin among diabetes patients, establishing a solid foundation for long-term growth.
- Dividend Payout Ratio: Despite trailing Eli Lilly in the GLP-1 weight-loss drug market, Novo Nordisk maintains a comfortable 40% payout ratio over the past 12 months, never exceeding 50%, indicating financial resilience even during economic downturns.
- High Dividend Yield: With a dividend yield of 3.9%, significantly above the pharmaceutical average of 1.7%, Novo Nordisk's strong diabetes business supports robust shareholder returns, enhancing its attractiveness as an investment.
- Innovative Drug Development: The recent launch of Novo Nordisk's first GLP-1 oral pill, while facing stiff competition, is expected to help regain market share in the short term, showcasing the company's ongoing commitment to innovation in the emerging drug niche.
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Analyst Views on NVO
Wall Street analysts forecast NVO stock price to rise
8 Analyst Rating
4 Buy
3 Hold
1 Sell
Moderate Buy
Current: 37.620
Low
42.00
Averages
54.67
High
70.00
Current: 37.620
Low
42.00
Averages
54.67
High
70.00
About NVO
Novo Nordisk A/S is a global healthcare company engaged in diabetes care. The Company is also engaged in the discovery, development, manufacturing and marketing of pharmaceutical products. The Company operates through two business segments: diabetes and obesity care, and biopharmaceuticals. The Company's diabetes and obesity care segment covers insulin, GLP-1, other protein-related products, such as glucagon, protein-related delivery systems and needles, and oral anti-diabetic drugs. The Company's biopharmaceuticals segment covers the therapy areas of hemophilia care, growth hormone therapy and hormone replacement therapy. The Company also offers Saxenda product to treat obesity. It offers a range of products, including NovoLog/NovoRapid; NovoLog Mix/NovoMix; Prandin/NovoNorm; NovoSeven; Norditropin, and Vagifem. As of December 31, 2016, it marketed its products in over 180 countries. Its regional structure consists of two commercial units: North America and International Operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Novo Nordisk's Market Challenges: Novo Nordisk was upgraded from Sell to Hold by KM Capital, as its market cap returns to pre-GLP-1 mania levels limiting downside, although intensifying competition from Eli Lilly remains a headwind, leading analysts to express skepticism about the potential for a share price rebound.
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- Innovative Revenue Model: Hims & Hers has established an annuity-like income stream through its subscription model, with customers consistently purchasing multiple products, driving stable revenue growth and future potential for expanding its product offerings to meet market demand.
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