Allergan, Inc. (AGN), Novo Nordisk A/S (ADR) (NVO): Should These Drug Companies Continue to Pay a Dividend?

Why yes, yes it should. The profit margins are strong, this is already a $93 billion company and it’s only trading around 24 times earnings. So the days of super growth may be behind Novo Nordisk A/S (ADR) (NYSE:NVO). And that’s okay, because it can still be a decent deal and continue to be a great little money machine.

The Foolish bottom line

Dividends are great, but a dividend applied at the wrong time or when the money is needed elsewhere can be very destructive. A company should pay a dividend when it can commit to paying a reasonable amount and when its time of greatest growth is in the past.

The article Should These Drug Companies Continue to Pay a Dividend? originally appeared on Fool.com and is written by Chris Hodge.

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