Novartis: Buy This Blue-Chip Dividend Stock On Sale Now

Core Viewpoint - Novartis is currently performing well despite a recent decline in net sales due to the spin-off of its Sandoz business, with strong growth in continuing operations and a positive outlook for future earnings and dividends [3][11][35] Financial Performance - Q1 2023 net sales were $12.953 billion, a 3% increase year-over-year, while Q1 2024 net sales decreased to $11.829 billion, an 8.7% decline due to the Sandoz spin-off [6][9] - Adjusted for the spin-off, net sales from continuing operations grew by 9.5% year-over-year in Q1 2024, with currency-neutral net sales increasing by 11% [11] - Core EPS for Q1 2024 rose by 16.9% to $1.80, exceeding analyst expectations [14] Growth Drivers - Novartis' top 20 brands saw net sales increase by 16% to $9.3 billion in Q1 2024, with 13 out of 20 brands experiencing growth [12][13] - The company has over 100 projects in clinical development and plans to submit more than two dozen indications in core therapeutic areas to regulatory authorities [16][17] Debt and Financial Health - Net debt increased from $10.2 billion to $15.8 billion, primarily due to a $5.2 billion annual dividend payment, but remains manageable [19] - Novartis maintains an AA- credit rating from S&P, indicating strong financial health and stability [20] Valuation and Dividend - Current P/E ratio is 13.8, below the 10-year average of 16.3, suggesting the stock is undervalued [22] - The forward dividend yield is 3.7%, significantly higher than the healthcare sector median of 1.5%, with a consistent annual growth of 6.9% over the last five years [28][30]