Daily Stock Analysis: Novartis AG

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Novartis AG has the ticker symbol NVS and is a member of the Healthcare sector as a generic drug manufacturer. This is my first report on Novartis for this Vista portfolio.  

Novartis AG develops and manufactures healthcare products through two segments: Innovative Medicines and Sandoz. 

It generates the vast majority of its revenue from the Innovative Medicines segment consisting of global business franchises in oncology, ophthalmology, neuroscience, immunology, respiratory, cardio-metabolic, and established medicines. 

The company sells its products globally, with the United States representing close to one-third of total revenue.

Novartis AG has a license and collaboration agreement with Alnylam Pharmaceuticals to develop, manufacture, and commercialize inclisiran; and an agreement with CureVac to manufacture COVID-19 vaccine candidate CVnCoV. 

The company was incorporated in 1996 and is headquartered in Basel, Switzerland.

Three key data points gauge dividend equities or funds like Novartis AG:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether a company has made, is making, and will make money. 

NVS Price

Novartis AG's price per share closed at $86.30 yesterday. One year ago its price was $83.99. Price per share has increased about 4.4% from the midst of the COVID market slump. 

Should Novartis AG's stock trade in the range of $75.00 to $105.00 this year, its recent $86.30 price might rise by $8.70 to reach $95.00 by April 8, 2022. My estimate is however $ 8.00 lower than the median of five estimates from analysts tracking the stock.

NVS Dividends

Novartis AG's most recent declared annual dividend paid March 15th was $3.20 annually and yields 3.71% at yesterday's $95,00 closing price. NVS has paid annual variable dividends for 29 years.

NVS Returns

Adding the $3.20 annual NVS anticipated dividend to my $8.70 price upside estimate shows an $11.90  potential gross gain, per share, to be reduced by any costs to trade the shares.  

Put little over $1,000.00 today in NVS at $86.30 per share and we'd buy 12 shares of NVS stock.

A $10 broker fee (if charged) would be paid half at purchase and half at a sale and might cost us about $0.83 per share.

Subtract that maybe $0.83 brokerage cost from my estimated $11.90 gross gain per share results in a net gain of $11.07 X 12 shares = $132.84 for a 13.2% net gain on a $1,035.60 investment.

Novartis AG shows a possible 13.2% net gain including a 3.71% dividend yield. 

Over the next year at this time, a $1000 investment in NVS could generate $37.10 in cash dividends. And a single share bought at yesterday's closing price was about $86.00! So, if NVS is your kind of healthcare investment, their price is nearly three times the annual dividend income from $1,000 invested. This suggests waiting for the price to pull back to under $60.00 before investing.

All of the estimates above are speculation based on the past history of Novartis AG. Only time and money invested in this stock will determine its worth.