Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Is Novo Nordisk's Dividend Safe?

Novo Nordisk  (NYSE: NVO  )  is one of the globe's biggest drug companies. It's a major player in providing diabetes treatments and is often included in dividend portfolios.

However, patent expirations and new drugs from competitors such as Eli Lilly (NYSE: LLY  )  are pressuring Novo to spend more on its research pipeline. As a result, dividend investors are right to question whether the risk of sliding sales threatens Novo's dividend payout.

In the following slideshow you'll see whether I think Novo's dividend is safe and gain insight into how the company's dividend yield matches up with industry peers Eli Lilly and AstraZeneca (NYSE: AZN  ) . 

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 19, 2014, at 3:45 AM, erich69 wrote:

    As a medical practitioner who treats diabetics I will tell you that Prandin is not a significant player in what is prescribed to patients so its patent expiration isn't critical. Levemir is the best long acting insulin available on the market, far superior to Sanofi's Lantus, and Eli Lilly's intermediate acting Humulin is comparable to Novo's Novolin. Eli Lilly's fast acting Humalog is also comparable to Novo's Novolog. Eli Lilly has been winning in the US due to price bidding leaving Novo more dependent on worldwide non-US sales. Novo's Victoza is a great drug but faces pressure as competitiors like Eli Lilly wait for approval for their products. As for as treatment goes for non insulin dependent diabetics, generics remain the bulk of what is prescribed with the remainder name brand drugs being made by variety of pharmaceutical companies.

  • Report this Comment On June 19, 2014, at 1:23 PM, Imcynical wrote:

    The nice thing about this discussion is that there really isn't any heavy lifting necessary to find the answer. NVO has been buying back 1.5-2.5% of it's outstanding stock for the last few years. Since there is plenty of money to cover the current dividend, should they decide to taper buybacks going forward, there would be more than enough money to double the current dividend if desired. I'll take the buybacks thanks.

  • Report this Comment On June 20, 2014, at 6:43 AM, FNN31 wrote:

    The dividend payout as a percentage of FCF is 47%; the remaining FCF was used for share buybacks. In the year end conference call, the CFO noted that they brought the payout up to this level (47% of FCF) to be in line with the industry.

    Guidance for 2014 FCF is 'around' 25 Billion Danish Kroner compared with 22.358 Billion in 2013.

    With a 47% expected FCF payout, FCF increasing by around 10%, and a significant share reduction from the buybacks I would speculate that this dividend is safe.

    What will the dividend be in 2020 or 2025?? I think this is an intriguing question.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2999216, ~/Articles/ArticleHandler.aspx, 9/2/2015 1:10:27 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Todd Campbell

Todd has been helping buy side portfolio managers as an independent researcher for over a decade. In 2003, Todd founded E.B. Capital Markets, LLC, a research firm providing action oriented ideas to professional investors. Todd has provided insight to a variety of publications, including SmartMoney, Barron's, and CNN/fn.

Today's Market

updated Moments ago Sponsored by:
DOW 16,229.91 171.56 1.07%
S&P 500 1,934.36 20.51 1.07%
NASD 4,687.55 51.45 1.11%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 12:54 PM
AZN $31.54 Up +0.85 +2.77%
AstraZeneca plc (A… CAPS Rating: ****
LLY $80.98 Up +1.18 +1.48%
Eli Lilly & Co. CAPS Rating: ****
NVO $54.68 Up +0.48 +0.88%
Novo Nordisk CAPS Rating: *****