We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where Novo Nordisk A/S (NYSE:NVO) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
An elderly couple receiving insulin from a pharmacist, representing healthcare company’s successful pharmaceutical products.
Novo Nordisk A/S (NYSE:NVO)
Novo Nordisk A/S (NYSE:NVO) is a manufacturer, researcher & developer, and distributor of pharmaceutical products. It operates through rare disease and diabetes and obesity Care segments. It offers products for obesity, rare blood disorders, cardiovascular, diabetes, rare endocrine disorders, and other therapy areas. The company has grown its revenue by 18.58% over the last 5 years.
Novo Nordisk A/S (NYSE:NVO)’s stock price fell after the CagriSema drug’s disappointing trial results. Despite strong earnings in the previous quarter, the share price has not recovered. Besides, last month the Amycretin trial results were released and stock showed an upward hike due to the satisfying results. Even though the drug won’t be available anytime soon as it is still in the early stages of testing, the long-term potential is quite clear.
Last year, the company increased its sales by 25% while operating margins also grew by 25%, raising the net profit by 21%. TD Cowen expects the company to be neck and neck in the weight loss drugs market with its semaglutide-based products Wegovy and Ozempic.
LLY and NVO are expected to remain the main drivers and beneficiaries of the market growth. But there are clinical and commercial lanes open to competition, and no dearth of market hopefuls vying for a spot as the diabetes and obesity landscape expands.
The company has a 45% market share in the weight loss market, behind only Eli Lily at 48%. This advantage should be strong enough for the company to fight off competition in the future.
Overall NVO ranks 12th on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of NVO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
