Novo Nordisk (NVO) is a Top Dividend Stock Right Now: Should You Buy?

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.Novo Nordisk in FocusNovo Nordisk (NVO) is headquartered in Bagsvaerd, and is in the Medical sector. The stock has seen a price change of -21.47% since the start of the year. The drugmaker is currently shelling out a dividend of $0.82 per share, with a dividend yield of 2.43%. This compares to the Large Cap Pharmaceuticals industry's yield of 2.37% and the S&P 500's yield of 1.6%.In terms of dividend growth, the company's current annualized dividend of $1.64 is up 59.8% from last year. Novo Nordisk has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 22.48%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Novo Nordisk's current payout ratio is 22%. This means it paid out 22% of its trailing 12-month EPS as dividend.Looking at this fiscal year, NVO expects solid earnings growth. The Zacks Consensus Estimate for 2025 is $3.89 per share, with earnings expected to increase 18.60% from the year ago period.Bottom LineInvestors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NVO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novo Nordisk A/S (NVO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks