Novartis
Novartis AG researches, develops, manufactures, and markets healthcare products worldwide. The last earnings update was 27 days ago. More info.
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NOVN Share Price and Events
7 Day Returns
1 Year Returns
NOVN Shareholder Return
| 7 Day | 30 Day | 90 Day | 1 Year | 3 Year | 5 Year | |
|---|---|---|---|---|---|---|
| Novartis (NOVN) | 2.6% | 8.5% | -7.8% | 9% | 7.4% | 3.2% |
| CH Pharmaceuticals | 2.9% | 3.9% | -5.1% | 12.4% | 7% | 1.4% |
| CH Market | 2% | -0.4% | 1.6% | 0.7% | 12.7% | 8.7% |
1 Year Return vs Industry and Market
- NOVN underperformed the Pharmaceuticals industry which returned 12.4% over the past year.
- NOVN outperformed the Market in Switzerland which returned 0.7% over the past year.
Price Volatility
Related Companies
Value
Is Novartis undervalued based on future cash flows and its price relative to the stock market?
Value is all about what a company is worth versus what price it is
available for. If you went into a grocery store and all the bananas were on sale
at half price, they could be considered
undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current
share
price of
Novartis
to its discounted cash flow analysis.value.The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Below are the data sources, inputs and calculation used to determine the intrinsic value for Novartis.
| Data Point | Source | Value |
|---|---|---|
| Valuation Model | 2 Stage Free Cash Flow to Equity | |
| Levered Free Cash Flow | Average of 21 Analyst Estimates (S&P Global) | See below |
| Discount Rate (Cost of Equity) | See below | 8.4% |
| Perpetual Growth Rate | 10-Year CH Government Bond Rate | 3.3% |
An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.
| Data Point | Calculation/ Source | Result |
|---|---|---|
| Risk-Free Rate | 10-Year CH Govt Bond Rate | 3.3% |
| Equity Risk Premium | S&P Global | 6% |
| Pharmaceuticals Unlevered Beta | Simply Wall St/ S&P Global | 0.69 |
| Re-levered Beta | = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.695 (1 + (1- 18%) (16.17%)) |
0.857 |
| Levered Beta | Levered Beta limited to 0.8 to 2.0 (practical range for a stable firm) |
0.86 |
| Discount Rate/ Cost of Equity |
= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 3.28% + (0.857 * 5.96%) |
8.38% |
Discounted Cash Flow Calculation for SWX:NOVN using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for Novartis is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
| Levered FCF (USD, Millions) | Source |
Present Value Discounted (@ 8.38%) |
|
|---|---|---|---|
| 2019 | 10,386.93 | Analyst x7 | 9,583.46 |
| 2020 | 11,932.57 | Analyst x9 | 10,157.90 |
| 2021 | 11,519.16 | Analyst x5 | 9,047.44 |
| 2022 | 11,347.86 | Est @ -1.49% | 8,223.45 |
| 2023 | 11,341.23 | Est @ -0.06% | 7,582.90 |
| 2024 | 11,448.02 | Est @ 0.94% | 7,062.21 |
| 2025 | 11,635.95 | Est @ 1.64% | 6,622.88 |
| 2026 | 11,883.99 | Est @ 2.13% | 6,240.83 |
| 2027 | 12,178.07 | Est @ 2.47% | 5,900.57 |
| 2028 | 12,508.68 | Est @ 2.71% | 5,591.93 |
| Present value of next 10 years cash flows | $76,013.57 | ||
| Calculation | Result | |
|---|---|---|
| Terminal Value |
= FCF2028
× (1 + g) ÷ (Discount Rate – g)
= $12,508.68 × (1 + 3.28%) ÷ (8.38% – 3.28%) |
$252,856.94 |
| Present Value of Terminal Value |
= Terminal Value ÷ (1 + r)10
= $252,856.94 ÷ (1 + 8.38%)10 |
$113,038.16 |
| Calculation | Result | |
|---|---|---|
| Total Equity Value |
= Present value of next 10 years cash flows +
Terminal Value
= $76,013.57 + $113,038.16 |
$189,051.73 |
| Equity Value per Share (USD) |
= Total value / Shares Outstanding
= $189,051.73 / 2,285.72 |
$82.71 |
| Calculation | Result | |
|---|---|---|
| Exchange Rate | USD/CHF
(Reporting currency to currency of SWX:NOVN) |
1.01 |
| Value per Share (CHF) |
= Value per Share in USD x Exchange Rate (USD/CHF)
= $82.71 x 1.01 |
CHF83.58 |
| Value per share (CHF) | From above. | CHF83.58 |
| Current discount | Discount to share price of
CHF83.61
= -1 x (CHF83.61 - CHF83.58) / CHF83.58 |
-0% |
Learn more about our DCF calculations in Simply Wall St’s analysis model .
- The current share price of Novartis is above its future cash flow value.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.The amount the stock market is willing to pay for Novartis's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are
Novartis's earnings available for a low price, and how does
this compare to other companies in the same industry?
| Data Point | Source | Value |
|---|---|---|
| Earnings Per Share * | Company Filings (2019-03-31) in USD | $5.40 |
| SWX:NOVN Share Price ** | SWX (2019-05-21) in CHF | CHF83.61 |
| SWX:NOVN Share Price converted to USD reporting currency | Exchange rate (CHF/ USD) 0.99 | $82.74 |
| Europe Pharmaceuticals Industry PE Ratio | Median Figure of 43 Publicly-Listed Pharmaceuticals Companies | 21.8x |
| Switzerland Market PE Ratio | Median Figure of 175 Publicly-Listed Companies | 17.87x |
* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.
** Primary Listing of Novartis.
| Calculation | Outcome | |
|---|---|---|
| PE Ratio | = SWX:NOVN Share Price ÷ EPS (both in USD) = 82.74 ÷ 5.40 |
15.33x |
Learn more about our ratios and growth rates in Simply Wall St’s analysis model >
- Novartis is good value based on earnings compared to the Europe Pharmaceuticals industry average.
- Novartis is good value based on earnings compared to the Switzerland market.
Price based on expected Growth
Does
Novartis's expected growth come at a high price?
| Data Point | Source | Value |
|---|---|---|
| PE Ratio | See PE Ratio Section | 15.33x |
| Net Income Annual Growth Rate | See Future Growth Section. Line of Best Fit* through Consensus Estimate Earnings of 21 Analysts |
5.8%per year |
| Europe Pharmaceuticals Industry PEG Ratio | Median Figure of 35 Publicly-Listed Pharmaceuticals Companies | 1.85x |
| Switzerland Market PEG Ratio | Median Figure of 124 Publicly-Listed Companies | 2.26x |
*Line of best fit is calculated by linear regression .
| Calculation | Outcome | |
|---|---|---|
| PEG Ratio | = PE Ratio ÷ Net Income Annual Growth Rate = 15.33x ÷ 5.8% |
2.64x |
Learn more about our ratios and growth rates in Simply Wall St’s analysis model >
- Novartis is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on
Novartis's
assets?
| Data Point | Source | Value |
|---|---|---|
| Book Value per Share | Company Filings (2019-03-31) in USD | $20.33 |
| SWX:NOVN Share Price * | SWX (2019-05-21) in CHF | CHF83.61 |
| SWX:NOVN Share Price converted to USD reporting currency | Exchange rate (CHF/ USD) 0.99 | $82.74 |
| Switzerland Pharmaceuticals Industry PB Ratio | Median Figure of 6 Publicly-Listed Pharmaceuticals Companies | 3.47x |
| Switzerland Market PB Ratio | Median Figure of 211 Publicly-Listed Companies | 1.62x |
| Calculation | Outcome | |
|---|---|---|
| PB Ratio | = SWX:NOVN Share Price ÷ Book Value per Share (both in USD) = 82.74 ÷ 20.33 |
4.07x |
* Primary Listing of Novartis.
Learn more about our ratios and growth rates in Simply Wall St’s analysis model >
- Novartis is overvalued based on assets compared to the CH Pharmaceuticals industry average.
Value checks
We assess Novartis's value by looking at:- Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
- Is the PE ratio less than the market average, and/ or less than the Pharmaceuticals industry average (and greater than 0)? (2 checks)
- Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
- Is the PB ratio less than the Pharmaceuticals industry average (and greater than 0)? (1 check) Novartis has a total score of 2/6, see the detailed checks below.
Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
Full details on the Value part of the Simply Wall St company analysis model.
Future Performance
How is Novartis expected to perform in the next 1 to 3 years based on estimates from 21 analysts?
The future performance of a company is measured in the same way as past
performance, by looking at estimated
growth
and how much profit it is expected to make.Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Earnings growth vs Low Risk Savings
- Novartis's earnings growth is expected to exceed the low risk savings rate of 3.3%.
Growth vs Market Checks
- Novartis's earnings growth is positive but not above the Switzerland market average.
- Novartis's revenue growth is positive but not above the Switzerland market average.
Annual Growth Rates Comparison
| Data Point | Source | Value (per year) |
|---|---|---|
| SWX:NOVN Future Earnings Growth Rate | Line of Best Fit* through Consensus Estimate Earnings of 21 Analysts | 5.8% |
| SWX:NOVN Future Revenue Growth Rate | Line of Best Fit* through Consensus Estimate Revenue of 21 Analysts | 3.1% |
| Switzerland Pharmaceuticals Industry Earnings Growth Rate | Market Cap Weighted Average | 8.6% |
| Switzerland Pharmaceuticals Industry Revenue Growth Rate | Market Cap Weighted Average | 2.8% |
| Switzerland Market Earnings Growth Rate | Market Cap Weighted Average | 11% |
| Switzerland Market Revenue Growth Rate | Market Cap Weighted Average | 3.8% |
*Line of best fit is calculated by linear regression .
Industry and Market average data is calculated daily.
Learn more about our growth rate calculations in Simply Wall St’s analysis model.
Analysts growth expectations
| Data Point | Source | Value |
|---|---|---|
| Past Financials | Company Filings (1 month ago) | See Below |
| Future Estimates | Average of up to 21 Analyst Estimates (S&P Global) | See Below |
| Date (Data in USD Millions) | Revenue | Cash Flow | Net Income * | Avg. No. Analysts |
|---|---|---|---|---|
| 2023-12-31 | 52,824 | 16,863 | 11,235 | 8 |
| 2022-12-31 | 51,937 | 16,499 | 10,841 | 8 |
| 2021-12-31 | 50,465 | 15,239 | 10,286 | 16 |
| 2020-12-31 | 48,328 | 14,404 | 9,150 | 21 |
| 2019-12-31 | 46,504 | 13,857 | 8,292 | 21 |
| Date (Data in USD Millions) | Revenue | Cash Flow | Net Income * |
|---|---|---|---|
| 2019-03-31 | 53,458 | 13,671 | 12,511 |
| 2018-12-31 | 53,166 | 14,272 | 12,611 |
| 2018-09-30 | 50,900 | 13,914 | 13,334 |
| 2018-06-30 | 50,471 | 13,450 | 13,792 |
| 2018-03-31 | 49,513 | 13,090 | 8,004 |
| 2017-12-31 | 50,135 | 12,621 | 7,703 |
| 2017-09-30 | 49,527 | 12,804 | 6,684 |
| 2017-06-30 | 49,176 | 12,449 | 6,543 |
| 2017-03-31 | 49,361 | 11,978 | 6,367 |
| 2016-12-31 | 49,386 | 11,475 | 6,712 |
| 2016-09-30 | 49,606 | 12,041 | 6,807 |
| 2016-06-30 | 49,750 | 11,936 | 6,672 |
*GAAP earnings excluding extraordinary items.
Past and Future Earnings per Share
| Data Point | Source | Value |
|---|---|---|
| Past Financials | Company Filings (1 month ago) | See Below |
| Future Estimates | Average of up to 21 Analyst Estimates (S&P Global) | See Below |
All data from Novartis Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.
| Date (Data in USD Millions) | EPS * | EPS High Estimate | EPS Low Estimate | Avg. No. Analysts |
|---|---|---|---|---|
| 2023-12-31 | 5.02 | 5.38 | 4.59 | 3.00 |
| 2022-12-31 | 4.84 | 5.18 | 4.42 | 3.00 |
| 2021-12-31 | 4.53 | 4.98 | 4.23 | 9.00 |
| 2020-12-31 | 4.01 | 4.50 | 3.28 | 12.00 |
| 2019-12-31 | 3.59 | 3.77 | 3.41 | 9.00 |
| Date (Data in USD Millions) | EPS * |
|---|---|
| 2019-03-31 | 5.40 |
| 2018-12-31 | 5.44 |
| 2018-09-30 | 5.74 |
| 2018-06-30 | 5.92 |
| 2018-03-31 | 3.43 |
| 2017-12-31 | 3.28 |
| 2017-09-30 | 2.83 |
| 2017-06-30 | 2.76 |
| 2017-03-31 | 2.68 |
| 2016-12-31 | 2.82 |
| 2016-09-30 | 2.86 |
| 2016-06-30 | 2.80 |
*GAAP earnings excluding extraordinary items.
Future performance checks
We assess Novartis's future performance by looking at:- Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
- Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Switzerland market? (1 check)
- Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Switzerland market? (1 check)
- Is the annual earnings growth rate expected to be above 20%? (1 check)
- Is the annual revenue growth rate expected to be above 20%? (1 check)
- Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Novartis has a total score of 1/6, see the detailed checks below.
Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.
Full details on the Future part of the Simply Wall St company analysis model.
Past Performance
How has Novartis performed over the past 5 years?
The past performance of a company can be measured by how much
growth
it has experienced and how much profit it makes relative to the funds and assets
it has available.
Past earnings growth
Past Earnings growth analysis
- Novartis's year on year earnings growth rate has been positive over the past 5 years.
- Novartis's 1-year earnings growth exceeds its 5-year average (56.3% vs 4.5%)
- Novartis's earnings growth has exceeded the Europe Pharmaceuticals industry average in the past year (56.3% vs 12%).
Earnings and Revenue History
All data from Novartis Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.
| Date (Data in USD Millions) | Revenue | Net Income * | G+A Expenses | R&D Expenses |
|---|---|---|---|---|
| 2019-03-31 | 53,458.00 | 12,511.00 | 16,465.00 | 8,865.00 |
| 2018-12-31 | 53,166.00 | 12,611.00 | 16,429.00 | 8,871.00 |
| 2018-09-30 | 50,900.00 | 13,334.00 | 15,454.00 | 8,433.00 |
| 2018-06-30 | 50,471.00 | 13,792.00 | 15,196.00 | 8,457.00 |
| 2018-03-31 | 49,513.00 | 8,004.00 | 14,812.00 | 8,323.00 |
| 2017-12-31 | 50,135.00 | 7,703.00 | 15,000.00 | 8,510.00 |
| 2017-09-30 | 49,527.00 | 6,684.00 | 14,713.00 | 8,460.00 |
| 2017-06-30 | 49,176.00 | 6,543.00 | 14,435.00 | 8,445.00 |
| 2017-03-31 | 49,361.00 | 6,367.00 | 14,278.00 | 8,573.00 |
| 2016-12-31 | 49,386.00 | 6,712.00 | 14,111.00 | 8,445.00 |
| 2016-09-30 | 49,606.00 | 6,807.00 | 14,110.00 | 8,773.00 |
| 2016-06-30 | 49,750.00 | 6,672.00 | 14,173.00 | 8,739.00 |
| 2016-03-31 | 49,967.00 | 6,722.00 | 14,141.00 | 8,755.00 |
| 2015-12-31 | 50,387.00 | 7,017.00 | 14,247.00 | 8,935.00 |
| 2015-09-30 | 50,635.00 | 8,417.00 | 14,241.00 | 8,685.00 |
| 2015-06-30 | 51,450.00 | 9,697.00 | 14,343.00 | 8,656.00 |
| 2015-03-31 | 52,503.00 | 10,536.00 | 14,552.00 | 8,628.00 |
| 2014-12-31 | 53,634.00 | 10,657.00 | 14,993.00 | 9,086.00 |
| 2014-09-30 | 53,908.00 | 10,191.00 | 15,122.00 | 8,910.00 |
| 2014-06-30 | 53,514.00 | 9,233.00 | 15,231.00 | 8,965.00 |
| 2014-03-31 | 52,845.00 | 9,095.00 | 15,189.00 | 9,034.00 |
| 2013-12-31 | 52,716.00 | 9,192.00 | 15,189.00 | 8,946.00 |
| 2013-09-30 | 54,100.00 | 9,191.00 | 15,720.00 | 9,077.00 |
| 2013-06-30 | 55,233.00 | 9,454.00 | 16,132.00 | 9,052.00 |
| 2013-03-31 | 56,494.00 | 9,547.00 | 16,698.00 | 9,090.00 |
| 2012-12-31 | 51,971.00 | 9,417.00 | 15,102.00 | 8,465.00 |
| 2012-09-30 | 57,489.00 | 8,460.00 | 17,451.00 | 8,983.00 |
| 2012-06-30 | 58,484.00 | 8,534.00 | 17,751.00 | 9,267.00 |
*GAAP earnings excluding extraordinary items.
Performance last year
We want to ensure a company is making the most of what it has available. This is
done by comparing the return (profit) to a company's available
funds,
assets
and
capital.
- Novartis has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
- Novartis used its assets more efficiently than the Europe Pharmaceuticals industry average last year based on Return on Assets.
- Novartis has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
Past performance checks
We assess Novartis's performance over the past 5 years by checking for:- Has earnings increased in past 5 years? (1 check)
- Has the earnings growth in the last year exceeded that of the Pharmaceuticals industry? (1 check)
- Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
- Is the Return on Equity (ROE) higher than 20%? (1 check)
- Is the Return on Assets (ROA) above industry average? (1 check)
- Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
Novartis has a total score of 6/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Full details on the Past part of the Simply Wall St company analysis model.
Health
How is Novartis's financial health and their level of debt?
A company's financial position is much like your own financial position,
it includes everything you own
(assets)
and owe
(liabilities).The boxes below represent the relative size of what makes up Novartis's finances.
The net worth of a company is the difference between its assets and liabilities.
- Novartis's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
- Novartis's cash and other short term assets cover its long term commitments.
Balance sheet
Assets
Liabilities and shares
- Low level of unsold assets.
- Debt is covered by short term assets, assets are 1.7x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t
bad,
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
All data from Novartis Company Filings, last reported 1 month ago.
| Date (Data in USD Millions) | Total Equity | Total Debt | Cash & Short Term Investments |
|---|---|---|---|
| 2019-03-31 | 47,307.00 | 30,590.00 | 7,046.00 |
| 2018-12-31 | 78,692.00 | 32,148.00 | 15,834.00 |
| 2018-09-30 | 78,019.00 | 31,782.00 | 14,541.00 |
| 2018-06-30 | 76,901.00 | 32,356.00 | 12,960.00 |
| 2018-03-31 | 71,211.00 | 34,110.00 | 6,393.00 |
| 2017-12-31 | 74,227.00 | 28,532.00 | 9,454.00 |
| 2017-09-30 | 72,370.00 | 30,160.00 | 9,399.00 |
| 2017-06-30 | 69,978.00 | 30,561.00 | 8,421.00 |
| 2017-03-31 | 67,646.00 | 31,257.00 | 8,237.00 |
| 2016-12-31 | 74,891.00 | 23,802.00 | 7,547.00 |
| 2016-09-30 | 75,066.00 | 26,566.00 | 7,739.00 |
| 2016-06-30 | 72,532.00 | 26,368.00 | 5,648.00 |
| 2016-03-31 | 71,889.00 | 28,094.00 | 5,070.00 |
| 2015-12-31 | 77,122.00 | 21,931.00 | 5,304.00 |
| 2015-09-30 | 76,785.00 | 22,701.00 | 5,932.00 |
| 2015-06-30 | 78,832.00 | 23,274.00 | 5,810.00 |
| 2015-03-31 | 76,444.00 | 25,113.00 | 7,363.00 |
| 2014-12-31 | 70,844.00 | 20,411.00 | 13,506.00 |
| 2014-09-30 | 71,424.00 | 19,607.00 | 10,427.00 |
| 2014-06-30 | 70,517.00 | 20,430.00 | 7,317.00 |
| 2014-03-31 | 70,336.00 | 21,211.00 | 7,721.00 |
| 2013-12-31 | 74,472.00 | 18,018.00 | 9,101.00 |
| 2013-09-30 | 72,179.00 | 18,775.00 | 7,270.00 |
| 2013-06-30 | 69,628.00 | 18,871.00 | 5,091.00 |
| 2013-03-31 | 67,148.00 | 20,944.00 | 6,035.00 |
| 2012-12-31 | 69,263.00 | 19,726.00 | 7,979.00 |
| 2012-09-30 | 67,205.00 | 20,840.00 | 5,801.00 |
| 2012-06-30 | 64,241.00 | 22,632.00 | 6,106.00 |
- Novartis's level of debt (64.7%) compared to net worth is high (greater than 40%).
- The level of debt compared to net worth has increased over the past 5 years (30.1% vs 64.7% today).
- Debt is well covered by operating cash flow (44.7%, greater than 20% of total debt).
- Interest payments on debt are well covered by earnings (EBIT is 16.4x coverage).
Financial health checks
We assess Novartis's financial health by checking for:- Are short term assets greater than short term liabilities? (1 check)
- Are short term assets greater than long term liabilities? (1 check)
- Has the debt to equity ratio increased in the past 5 years? (1 check)
- Is the debt to equity ratio over 40%? (1 check)
- Is the debt covered by operating cash flow? (1 check)
- Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check) Novartis has a total score of 3/6, see the detailed checks below.
- Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
- Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
Full details on the Health part of the Simply Wall St company analysis model.
Dividends
What is Novartis's current dividend yield, its reliability and sustainability?
Dividends are regular cash payments to you from the company, similar to a
bank paying you interest on a savings account.
Annual Dividend Income
If you bought
CHF2,000 of
Novartis
shares you are expected to receive
CHF67
in your first year as a dividend.
Dividend Amount
- Novartis's pays a higher dividend yield than the bottom 25% of dividend payers in Switzerland (1.98%).
- Novartis's dividend is below the markets top 25% of dividend payers in Switzerland (3.77%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not
wildly increasing/decreasing each year. This graph shows you the historical rate
to count toward your assessment of the stock.We also check to see if the dividend has increased in the past 10 years.
| Data Point | Source | Value |
|---|---|---|
| Past Annualized Dividend Yield | S&P Global Market Data | See Below |
| Past Dividends per Share | Company Filings/ Annualized Dividend Payments | See Below |
| Future Dividends per Share Estimates | Average of up to 21 Analyst Estimates (S&P Global) | See Below |
| Europe Pharmaceuticals Industry Average Dividend Yield | Market Cap Weighted Average of 32 Stocks | 3.4% |
| Switzerland Market Average Dividend Yield | Market Cap Weighted Average of 166 Stocks | 3.1% |
| Switzerland Minimum Threshold Dividend Yield | 10th Percentile | 1.3% |
| Switzerland Bottom 25% Dividend Yield | 25th Percentile | 2% |
| Switzerland Top 25% Dividend Yield | 75th Percentile | 3.8% |
Industry and Market average data is calculated daily.
Note all dividend per share amounts are annualized and not quarterly or other period.
| Date (Data in $) | Dividend per Share (annual) | Avg. No. Analysts |
|---|---|---|
| 2023-12-31 | 3.39 | 3.00 |
| 2022-12-31 | 3.29 | 3.00 |
| 2021-12-31 | 3.13 | 16.00 |
| 2020-12-31 | 3.03 | 19.00 |
| 2019-12-31 | 2.92 | 20.00 |
| Date (Data in $) | Dividend per share (annual) | Avg. Yield (%) |
|---|---|---|
| 2019-02-28 | 2.788 | 3.275 |
| 2019-01-30 | 2.890 | 3.237 |
| 2018-03-02 | 2.777 | 3.455 |
| 2017-01-25 | 2.709 | 3.445 |
| 2017-01-24 | 2.749 | 3.907 |
| 2016-02-23 | 2.617 | 3.610 |
| 2015-02-27 | 2.523 | 2.863 |
| 2014-02-25 | 2.405 | 2.945 |
| 2013-02-22 | 2.349 | 3.326 |
| 2012-02-23 | 2.263 | 4.088 |
| 2011-02-22 | 2.300 | 4.366 |
| 2010-01-26 | 1.808 | 3.822 |
Learn more about our ratios and growth rates in Simply Wall St’s analysis model >
- Whilst dividend payments have been stable, Novartis has been paying a dividend for less than 10 years.
- Dividend payments have increased, but Novartis only paid a dividend in the past 9 years.
Income/ dividend checks
We assess Novartis's dividend by checking for:- Firstly is the company paying a notable dividend (greater than 1.3%) - if not then the rest of the checks are ignored.
- Is current dividend yield above the bottom 25% of dividend payers? (1 check)
- Is current dividend yield above the top 25% of dividend payers? (1 check)
- Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
- If they have paid a dividend for 10 years has it increased in this time? (1 check)
- How sustainable is the dividend, can Novartis afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks) Novartis has a total score of 3/6, see the detailed checks below.
Full details on the Dividends part of the Simply Wall St company analysis model.
Management
CEO
| COMPENSATION | $9,921,492 |
| AGE | 42 |
| TENURE AS CEO | 1.3 years |
CEO Bio
Dr. Vasant Narasimhan, also known as Vas, M.D., serves as Chief Executive Officer of Novartis AG at Novartis India Ltd. Dr. Narasimhan has been Chief Executive Officer of Novartis AG since February 1, 2018. Dr. Narasimhan served as Global Head of Drug Development and Chief Medical Officer at Novartis AG from February 1, 2016 to February 1, 2018. Dr. Narasimhan has functional oversight for drug development for General Medicines, Ophthalmology Pharmaceuticals, Oncology and Dow Jones Newswires Biosimilars that creates a stronger collaboration across these units. He served as Global Head of Development at Novartis Pharmaceuticals Corporation since August 1, 2014. He joined Novartis in 2005 and has worked within the Pharmaceuticals and Vaccines businesses. He served as the Global Head of Biopharmaceuticals & Oncology Injectables at Sandoz International GmbH. He received his medical degree from Harvard Medical School in the US, a master’s degree in public policy from Harvard’s John F. Kennedy School of Government, and a bachelor’s degree in biological sciences from the University of Chicago in the US.
CEO Compensation
- Vas's compensation has been consistent with company performance over the past year, both up more than 20%.
- Vas's remuneration is higher than average for companies of similar size in Switzerland.
Management Team Tenure
Average tenure and age of the Novartis management team in years:
- The average tenure for the Novartis management team is less than 2 years, this suggests a new team.
Management Team
Vas Narasimhan
Chief Executive Officer
$10M
42
1.3 yrs
Harry Kirsch
Chief Financial Officer
$6M
53
6 yrs
Steffen Lang
Global Head of Technical Operations
$2M
51
2.1 yrs
Shannon Klinger
Group General Counsel
$2M
47
0.9 yrs
Klaus Moosmayer
Chief Ethics
$1M
50
0.4 yrs
Steven Baert
Chief People & Organization Officer
$4M
44
5.3 yrs
Bertrand Bodson
Chief Digital Officer
$2M
43
1.3 yrs
John Tsai
Head of Global Drug Development & Chief Medical Officer
$6M
51
1 yrs
Robert Weltevreden
Head of Novartis Business Services
$2M
49
0.9 yrs
Jay Bradner
President of Novartis Institutes for Biomedical Research
$6M
46
3.2 yrs
Board of Directors Tenure
Average tenure and age of the Novartis board of directors in years:
- The tenure for the Novartis board of directors is about average.
Board of Directors
Joerg Reinhardt
Independent Non Executive Chairman
$4M
62
5.8 yrs
Enrico Vanni
Independent Non Executive Vice Chairman
$528K
67
6.3 yrs
Alex Krauer
Honorary Chairman
Dan Vasella
Honorary Chairman
$3M
65
Srikant T. Datar
Independent Non Executive Director
$458K
65
16.3 yrs
Andreas von Planta
Independent Non Executive Director
$463K
63
13.3 yrs
Liz Doherty
Independent Non-Executive Director
$450K
61
3.3 yrs
Ann Fudge
Independent Non Executive Director
$398K
67
11.3 yrs
Charles Sawyers
Independent Non Executive Director
$360K
59
6.3 yrs
Bill Winters
Independent Non Executive Director
$322K
57
6.3 yrs
Who owns this company?
Recent Insider Transactions
| Announced | Type | Name | Entity | Role | Start | End | Shares | Max Price (CHF) | Value (CHF) | |
|---|---|---|---|---|---|---|---|---|---|---|
Management checks
We assess Novartis's management by checking for:- Is the CEO's compensation unreasonable compared to market cap? (1 check)
- Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
- Is the average tenure of the management team less than 2 years? (1 check)
- Is the average tenure of the board of directors team less than 3 years? (1 check) Novartis has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.
Note: We use the top 6 management executives and board members in our calculations.
Note 2: Insider trading include any internal stakeholders and these transactions .
Full details on the Management part of the Simply Wall St company analysis model.
News
Simply Wall St News
Calculating The Fair Value Of Novartis AG (VTX:NOVN)
We assume companies with shrinking free cash flow are will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. … Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 10-year free cash flow (FCF) forecast 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF ($, Millions) $10.39k $11.93k $11.52k $11.35k $11.35k $11.45k $11.64k $11.89k $12.19k $12.52k Growth Rate Estimate Source Analyst x7 Analyst x10 Analyst x5 Est @ -1.47% Est @ -0.05% Est @ 0.95% Est @ 1.65% Est @ 2.13% Est @ 2.48% Est @ 2.72% Present Value ($, Millions) Discounted @ 8.42% $9.58k $10.15k $9.04k $8.22k $7.58k $7.05k $6.61k $6.23k $5.89k $5.58k Present Value of 10-year Cash Flow (PVCF)= $75.93b "Est" = FCF growth rate estimated by Simply Wall St The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … Terminal Value (TV) = FCF2029 × (1 + g) ÷ (r – g) = US$13b × (1 + 3.3%) ÷ (8.4% – 3.3%) = US$251b Present Value of Terminal Value (PVTV) = TV / (1 + r)10 = $US$251b ÷ ( 1 + 8.4%)10 = $112.08b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is $188.01b.
Simply Wall St - – Full articleIf You Like EPS Growth Then Check Out Novartis (VTX:NOVN) Before It's Too Late
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. … Novartis maintained stable EBIT margins over the last year, all while growing revenue 8.0% to US$53b. … In the chart below, you can see how the company has grown earnings, and revenue, over time
Simply Wall St - – Full articleDo Institutions Own Novartis AG (VTX:NOVN) Shares?
Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. … We also tend to see lower insider ownership in companies that were previously publicly owned. … Our analysis of the ownership of the company, below, shows that.
Simply Wall St - – Full articleDoes Novartis AG's (VTX:NOVN) P/E Ratio Signal A Buying Opportunity?
Novartis has a price to earnings ratio of 17.7, based on the last twelve months. … Price to Earnings Ratio = Price per Share (in the reporting currency) ÷ Earnings per Share (EPS) … P/E of 17.7 = $96.23 (Note: this is the share price in the reporting currency, namely, USD ) ÷ $5.44
Simply Wall St - – Full articleIs Novartis AG's (VTX:NOVN) Balance Sheet A Threat To Its Future?
the key to their continued success lies in its financial health. … This article will examine Novartis’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself
Simply Wall St - – Full articleDoes Novartis AG (VTX:NOVN) Have A Place In Your Portfolio?
Novartis AG (VTX:NOVN) has pleased shareholders over the past 10 years, by paying out dividends. … The company currently pays out a dividend yield of 3.3% to shareholders, making it a relatively attractive dividend stock. … View our latest analysis for Novartis
Simply Wall St - – Full articleInvestors Are Undervaluing Novartis AG (VTX:NOVN) By 38.33%
by taking the foreast future cash flows of the company and discounting them back to today's value. … Discounted Cash Flows (DCF). … If you want to learn more about discounted cash flow, the basis for my calcs can be read in detail in the Simply Wall St analysis model
Simply Wall St - – Full articleWhy Novartis AG (VTX:NOVN) Is An Attractive Investment To Consider
Novartis AG (VTX:NOVN) is a company with exceptional fundamental characteristics. … Upon building up an investment case for a stock, we should look at various aspects. … that has been a rockstar for income investors, currently trading at an attractive share price
Simply Wall St - – Full articleHere's How P/E Ratios Can Help Us Understand Novartis AG (VTX:NOVN)
This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). … Price to Earnings Ratio = Share Price (in reporting currency) ÷ Earnings per Share (EPS) … P/E of 14.61 = $84.27 (Note: this is the share price in the reporting currency, namely, USD ) ÷ $5.77
Simply Wall St - – Full articleIs Novartis AG's (VTX:NOVN) 18% Better Than Average?
This article is for those who would like to learn about Return On Equity (ROE). … One way to conceptualize this, is that for each CHF1 of shareholders' equity it has, the company made CHF0.18 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
Simply Wall St - – Full articleCompany Info
Description
Novartis AG researches, develops, manufactures, and markets healthcare products worldwide. The company’s Innovative Medicines segment offers patented prescription medicines for patients and healthcare providers. It also provides ophthalmology, neuroscience, immunology, hepatology and dermatology, respiratory, cardio-metabolic, and established medicine products. The company’s Sandoz segment provides active ingredients and finished dosage forms of pharmaceuticals in cardiovascular, central nervous system, dermatology, gastrointestinal and hormonal therapy, metabolism, oncology, ophthalmic, pain, and respiratory areas; and finished dosage form anti-infective. It also provides active pharmaceutical ingredients and intermediates primarily antibiotics; protein- or other biotechnology-based products, including biosimilars; and biotechnology manufacturing services. The company’s Alcon segment offers intraocular lenses and equipment for cataract procedures; equipment, instruments, and devices for vitreoretinal surgeries; surgical equipment and diagnostic devices for refractive surgical procedures; and devices to treat glaucoma. It also provides viscoelastics, surgical solutions, diagnostic ophthalmic products, surgical packs, and other disposable products for cataract and vitreoretinal surgery. In addition, this segment offers contact lenses and ocular health products; over-the-counter ophthalmic products; eye drops for the temporary relief of ocular itching due to allergies; vitamins for ocular health; and iLux Device, a therapeutic device used to treat meibomian gland dysfunction. Novartis AG has collaboration agreements with Xencor; Surface Oncology; Ligand Pharmaceuticals, Inc.; Amgen; University of California, Berkeley; Bristol-Myers Squibb; IBM Watson Health; Allergan plc; Science 37, Inc.; Bill & Melinda Gates Foundation; PEAR Therapeutics; Pfizer; Conatus Pharmaceuticals Inc.; and TRIO. The company was founded in 1895 and is headquartered in Basel, Switzerland.
Details
| Name: | Novartis AG |
| NOVN | |
| Exchange: | SWX |
| Founded: | 1895 |
| CHF191,108,765,678 | |
| 2,285,716,609 | |
| Website: | http://www.novartis.com |
| Address: |
Novartis AG Lichtstrasse 35, Basel, Basel-Stadt, 4056, Switzerland |
Listings
| Exchange Symbol | Ticker Symbol | Security | Exchange | Country | Currency | Listed on | |
|---|---|---|---|---|---|---|---|
| SWX | NOVN | Common Stock | SIX Swiss Exchange | CH | CHF | 23. Dec 1996 | |
| OTCPK | NVSE.F | Common Stock | Pink Sheets LLC | US | USD | 23. Dec 1996 | |
| DB | NOT | Common Stock | Deutsche Boerse AG | DE | EUR | 23. Dec 1996 | |
| XTRA | NOT | Common Stock | XETRA Trading Platform | DE | EUR | 23. Dec 1996 | |
| LSE | 0QLR | Common Stock | London Stock Exchange | GB | CHF | 23. Dec 1996 | |
| BATS-CHIXE | NOVNZ | Common Stock | BATS 'Chi-X Europe' | GB | CHF | 23. Dec 1996 | |
| BATS-CHIXE | NOTD | Common Stock | BATS 'Chi-X Europe' | GB | EUR | 23. Dec 1996 | |
| NYSE | NVS | SPONSORED ADR | New York Stock Exchange | US | USD | 18. Nov 1991 | |
| SWX | NOVNEE | CHF0.50 (2ND BUYBACK LINE) | SIX Swiss Exchange | CH | CHF | 13. Mar 2008 | |
| DB | NOTA | SPONSORED ADR | Deutsche Boerse AG | DE | EUR | 18. Nov 1991 | |
| LSE | 0K9E | SPONSORED ADR | London Stock Exchange | GB | USD | 18. Nov 1991 | |
| LSE | 0QM7 | CHF0.50 (2ND BUYBACK LINE) | London Stock Exchange | GB | CHF | 13. Mar 2008 | |
| BMV | NVS N | SPONSORED ADR | Bolsa Mexicana de Valores | MX | MXN | 18. Nov 1991 |
Number of employees
Current staff
Industry
| Pharmaceuticals | |
| Pharmaceuticals & Biotech |
Company Analysis and Financial Data Status
| Area | Date (UTC time) |
|---|---|
| Company Analysis updated: | 2019/05/21 21:01 |
| End of day share price update: | 2019/05/21 00:00 |
| Last estimates confirmation: | 2019/05/21 |
| Last earnings filing: | 2019/04/24 |
| Last earnings reported: | 2019/03/31 |
| Last annual earnings reported: | 2018/12/31 |
All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.
