CVS HEALTH CORP (CVS) Stock Fundamental Analysis
NYSE:CVS - New York Stock Exchange, Inc. - US1266501006 - Common Stock - Currency: USD
CVS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 106 industry peers in the Health Care Providers & Services industry. While CVS is still in line with the averages on profitability rating, there are concerns on its financial health. CVS has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally CVS also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
CVS had positive earnings in the past year.
CVS had a positive operating cash flow in the past year.
CVS had positive earnings in each of the past 5 years.
CVS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CVS has a Return On Assets (1.82%) which is comparable to the rest of the industry.
CVS's Return On Equity of 6.11% is fine compared to the rest of the industry. CVS outperforms 63.21% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.29%, CVS is in line with its industry, outperforming 51.89% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CVS is below the industry average of 8.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.82% | ||
| ROE | 6.11% | ||
| ROIC | 4.29% |
ROA(3y)2.35%
ROA(5y)2.72%
ROE(3y)7.68%
ROE(5y)8.81%
ROIC(3y)6.22%
ROIC(5y)6.35%
1.3 Margins
With a Profit Margin value of 1.24%, CVS perfoms like the industry average, outperforming 56.60% of the companies in the same industry.
In the last couple of years the Profit Margin of CVS has declined.
The Operating Margin of CVS (2.63%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of CVS has declined.
CVS has a Gross Margin of 13.79%. This is in the lower half of the industry: CVS underperforms 72.64% of its industry peers.
In the last couple of years the Gross Margin of CVS has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.63% | ||
| PM (TTM) | 1.24% | ||
| GM | 13.79% |
OM growth 3Y-19.77%
OM growth 5Y-11.12%
PM growth 3Y-23.26%
PM growth 5Y-13.69%
GM growth 3Y-8.24%
GM growth 5Y-18.43%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CVS is destroying value.
CVS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CVS has been reduced compared to 5 years ago.
CVS has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.16 indicates that CVS is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.16, CVS perfoms like the industry average, outperforming 51.89% of the companies in the same industry.
CVS has a debt to FCF ratio of 10.48. This is a negative value and a sign of low solvency as CVS would need 10.48 years to pay back of all of its debts.
CVS's Debt to FCF ratio of 10.48 is in line compared to the rest of the industry. CVS outperforms 52.83% of its industry peers.
A Debt/Equity ratio of 0.83 indicates that CVS is somewhat dependend on debt financing.
The Debt to Equity ratio of CVS (0.83) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 10.48 | ||
| Altman-Z | 2.16 |
ROIC/WACC0.57
WACC7.48%
2.3 Liquidity
CVS has a Current Ratio of 0.81. This is a bad value and indicates that CVS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of CVS (0.81) is worse than 83.96% of its industry peers.
A Quick Ratio of 0.60 indicates that CVS may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.60, CVS is doing worse than 83.02% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
The earnings per share for CVS have decreased strongly by -37.99% in the last year.
CVS shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -5.20% yearly.
CVS shows a small growth in Revenue. In the last year, the Revenue has grown by 4.20%.
Measured over the past years, CVS shows a small growth in Revenue. The Revenue has been growing by 7.74% on average per year.
EPS 1Y (TTM)-37.99%
EPS 3Y-13.62%
EPS 5Y-5.2%
EPS Q2Q%-43.87%
Revenue 1Y (TTM)4.2%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%4.15%
3.2 Future
The Earnings Per Share is expected to grow by 12.74% on average over the next years. This is quite good.
CVS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.22% yearly.
EPS Next Y10.01%
EPS Next 2Y12.75%
EPS Next 3Y13.32%
EPS Next 5Y12.74%
Revenue Next Year4.67%
Revenue Next 2Y4.78%
Revenue Next 3Y4.95%
Revenue Next 5Y4.22%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 12.42 indicates a correct valuation of CVS.
Based on the Price/Earnings ratio, CVS is valued cheaper than 82.08% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, CVS is valued rather cheaply.
The Price/Forward Earnings ratio is 11.29, which indicates a very decent valuation of CVS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CVS indicates a rather cheap valuation: CVS is cheaper than 86.79% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.08. CVS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.42 | ||
| Fwd PE | 11.29 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, CVS is valued a bit cheaper than 79.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.43 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
CVS's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as CVS's earnings are expected to grow with 13.32% in the coming years.
PEG (NY)1.24
PEG (5Y)N/A
EPS Next 2Y12.75%
EPS Next 3Y13.32%
5. Dividend
5.1 Amount
CVS has a Yearly Dividend Yield of 3.86%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.65, CVS pays a better dividend. On top of this CVS pays more dividend than 95.28% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, CVS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.86% |
5.2 History
The dividend of CVS has a limited annual growth rate of 5.72%.
CVS has been paying a dividend for at least 10 years, so it has a reliable track record.
CVS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.72%
Div Incr Years3
Div Non Decr Years28
5.3 Sustainability
CVS pays out 73.10% of its income as dividend. This is not a sustainable payout ratio.
CVS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP73.1%
EPS Next 2Y12.75%
EPS Next 3Y13.32%
67.29
-1.26 (-1.84%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners85.02%
Inst Owner Change0.01%
Ins Owners0.06%
Ins Owner Change5.12%
Market Cap84.95B
Analysts76.36
Price Target72.4 (7.59%)
Short Float %1.64%
Short Ratio1.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.86% |
Yearly Dividend2.65
Dividend Growth(5Y)5.72%
DP73.1%
Div Incr Years3
Div Non Decr Years28
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.57%
Min EPS beat(2)-28.4%
Max EPS beat(2)27.26%
EPS beat(4)2
Avg EPS beat(4)-4.97%
Min EPS beat(4)-28.4%
Max EPS beat(4)27.26%
EPS beat(8)6
Avg EPS beat(8)-0.48%
EPS beat(12)10
Avg EPS beat(12)1.15%
EPS beat(16)14
Avg EPS beat(16)3.69%
Revenue beat(2)1
Avg Revenue beat(2)0.71%
Min Revenue beat(2)-0.46%
Max Revenue beat(2)1.87%
Revenue beat(4)1
Avg Revenue beat(4)-0.43%
Min Revenue beat(4)-1.85%
Max Revenue beat(4)1.87%
Revenue beat(8)5
Avg Revenue beat(8)1%
Revenue beat(12)9
Avg Revenue beat(12)2.25%
Revenue beat(16)13
Avg Revenue beat(16)2.08%
PT rev (1m)0.18%
PT rev (3m)7.89%
EPS NQ rev (1m)2.18%
EPS NQ rev (3m)23.94%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-3.93%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-0.46%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.42 | ||
| Fwd PE | 11.29 | ||
| P/S | 0.23 | ||
| P/FCF | 13.43 | ||
| P/OCF | 9.33 | ||
| P/B | 1.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)5.42
EY8.05%
EPS(NY)5.96
Fwd EY8.86%
FCF(TTM)5.01
FCFY7.45%
OCF(TTM)7.21
OCFY10.72%
SpS295.32
BVpS59.86
TBVpS-34.09
PEG (NY)1.24
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.82% | ||
| ROE | 6.11% | ||
| ROCE | 5.81% | ||
| ROIC | 4.29% | ||
| ROICexc | 4.58% | ||
| ROICexgc | 17.8% | ||
| OM | 2.63% | ||
| PM (TTM) | 1.24% | ||
| GM | 13.79% | ||
| FCFM | 1.7% |
ROA(3y)2.35%
ROA(5y)2.72%
ROE(3y)7.68%
ROE(5y)8.81%
ROIC(3y)6.22%
ROIC(5y)6.35%
ROICexc(3y)6.76%
ROICexc(5y)6.87%
ROICexgc(3y)25.87%
ROICexgc(5y)25.07%
ROCE(3y)8.35%
ROCE(5y)8.51%
ROICexcg growth 3Y-10.65%
ROICexcg growth 5Y-1.15%
ROICexc growth 3Y-14.28%
ROICexc growth 5Y-4.08%
OM growth 3Y-19.77%
OM growth 5Y-11.12%
PM growth 3Y-23.26%
PM growth 5Y-13.69%
GM growth 3Y-8.24%
GM growth 5Y-18.43%
F-Score5
Asset Turnover1.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 10.48 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 0.75% | ||
| Interest Coverage | -3.37 | ||
| Cash Conversion | N/A | ||
| Profit Quality | 137.1% | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 2.16 |
F-Score5
WACC7.48%
ROIC/WACC0.57
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)0.81%
Cap/Sales(5y)0.84%
Profit Quality(3y)191.23%
Profit Quality(5y)191.5%
High Growth Momentum
Growth
EPS 1Y (TTM)-37.99%
EPS 3Y-13.62%
EPS 5Y-5.2%
EPS Q2Q%-43.87%
EPS Next Y10.01%
EPS Next 2Y12.75%
EPS Next 3Y13.32%
EPS Next 5Y12.74%
Revenue 1Y (TTM)4.2%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%4.15%
Revenue Next Year4.67%
Revenue Next 2Y4.78%
Revenue Next 3Y4.95%
Revenue Next 5Y4.22%
EBIT growth 1Y-35.07%
EBIT growth 3Y-12.98%
EBIT growth 5Y-4.24%
EBIT Next Year40.63%
EBIT Next 3Y19.8%
EBIT Next 5YN/A
FCF growth 1Y-39.14%
FCF growth 3Y-26.21%
FCF growth 5Y-9.45%
OCF growth 1Y-32.17%
OCF growth 3Y-20.7%
OCF growth 5Y-6.65%