Novo Nordisk Rapidly Raising Dividend

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DrugmakerNovo Nordisk ( NVO ) has boosted its dividend sharply the past couple of years.

The annual dividend was recently raised 29% to the equivalent of about $3.11 a share for holders of its U.S.-traded shares, according to a filing with the U.S. Securities & Exchange Commission.

The dividend was increased 37% the previous year, and by 23% the year before that.


Thanks to such beefy increases, Novo Nordisk has one of the highest dividend growth rates in IBD's stock database. Despite that, the annualized dividend yield works out to about 1%.

The Denmark-based company is one of the world's largest producers of insulin, which is essential for many diabetes patients.

Besides the dividend and solid customer base, another appeal for income investors is Novo Nordisk's steady stock and earnings performance.

The stock has been in a long advance since a major bottom four years ago. It has formed a few bases and is working on another one now.

In February, a delay in the approval for a long-acting insulin candidate sent shares skidding.

The company's five-year Earnings Stability Factor is 4 on a scale of 0 to 99, in which 0 represents the most steady performances.

Its five-year EPS growth rate is 24%. Its five-year sales growth rate is 11%, which is more or less in line with other major pharmaceutical companies.

After it reported Q1 results on May 1, the company raised its sales-growth forecast to 9%-11% from 8%-11%. It kept its full-year profit forecast at a 10% increase.

After the latest results, analysts at DNB Markets noted they expect "at least one more guidance upgrade in 2013" by management.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: NVO

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