Key Takeaways:
- Novo Nordisk currently offers its highest dividend yield in the past 5 years.
- Earnings-per-share and dividends are projected to grow about 15% annually over the next 3 years.
- Wall Street analysts think this pharmaceutical giant has 63% upside from its current share price.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
After a sharp selloff, Novo Nordisk is starting to look like an attractive opportunity for long-term investors.
The industry leader now offers its highest dividend yield in five years, while its core pharmaceutical business in diabetes and obesity treatments continues to drive solid growth.
With analysts projecting that the stock could have 63% upside from today’s price, Novo Nordisk could be a dividend stock with a compelling mix of value and growth.
Why Has Novo’s Stock Price Dropped?
Novo’s stock is down around 50% in the past year, and here’s why:
- Eli Lilly’s Zepbound has gained rapid traction, challenging Novo Nordisk’s Wegovy in new U.S. prescriptions. This has raised competitive pressures.
- Novo’s next-gen obesity drug CagriSema delivered good results, but not the kind of blowout investors were hoping for.
- Regulatory moves around compounded GLP-1 drugs added some short-term uncertainty to the market.
Even with these headwinds, the long-term story hasn’t changed. Novo is still growing and is still a leading pharmaceutical company.
Analysts Think The Stock Has Over 60% Upside Today
Wall Street analysts have a consensus price target of $101/share for Novo, which means they think the stock could go up over 60% in the next year and a half.
With so much potential upside for a $270B company, the stock really seems to be worth a closer look.
See why Novo Nordisk looks undervalued today with TIKR (It’s free) >>>
1: Dividend Yield
Novo Nordisk’s dividend yield currently sits at 2.6%. That might not sound high, but it’s actually the best yield the stock has offered in years. It’s a good sign when a stock is offering a high dividend yield relative to its long-term average, because that typically means the stock is cheap.
Novo is also one of Europe’s most dependable dividend payers. The company has steadily raised its dividend, and with earnings growing fast, there’s plenty of room for more increases going forward.
Find high-quality dividend stocks that look even better than Novo Nordisk today. (It’s free) >>>
2: Dividend Safety
As of year-end 2024, Novo Nordisk had a dividend payout ratio of just over 50% . That’s a comfortable payout ratio for a company like Novo because it gives the company plenty of room to reinvest in growth while still delivering steady dividends to shareholders.
Even though the dividend yield isn’t huge, the consistency is impressive. Looking ahead, analysts expect Novo Nordisk to keep earnings well above its dividend over the next several years, as EPS is projected to grow steadily while the dividend rises in tandem.
See Novo Nordisk’s full growth forecast. (It’s free) >>>
3: Dividend Growth Potential
Over the past 5 years, management has grown the company’s dividend at about the same rate as EPS growth.
Over the next 3 years, analysts expect EPS to grow at a 16.5% CAGR, while analysts expect dividends to grow at about the same rate, or perhaps a bit slower.
Double-digit earnings growth is very good, especially for a large cap company like Novo Nordisk.
This double-digit expected annual earnings and dividend growth looks exciting for value, growth, and dividend investors alike.
TIKR Takeaway
Novo Nordisk is a dividend stock with real long-term potential. It doesn’t offer the highest dividend yield, but analysts think the stock has over 60% upside today. Additionally, earnings and dividends are expected to grow around 15% annually over the next 3 years.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
