CVS HEALTH CORP (CVS) Stock Fundamental Analysis
NYSE:CVS - New York Stock Exchange, Inc. - US1266501006 - Common Stock - Currency: USD
Taking everything into account, CVS scores 4 out of 10 in our fundamental rating. CVS was compared to 103 industry peers in the Health Care Providers & Services industry. There are concerns on the financial health of CVS while its profitability can be described as average. CVS is valued quite cheap, but it does not seem to be growing. CVS also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
CVS had positive earnings in the past year.
In the past year CVS had a positive cash flow from operations.
CVS had positive earnings in each of the past 5 years.
In the past 5 years CVS always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.07%, CVS is in line with its industry, outperforming 56.31% of the companies in the same industry.
CVS's Return On Equity of 6.86% is fine compared to the rest of the industry. CVS outperforms 66.99% of its industry peers.
With a Return On Invested Capital value of 4.85%, CVS perfoms like the industry average, outperforming 54.37% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CVS is below the industry average of 9.71%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.07% | ||
| ROE | 6.86% | ||
| ROIC | 4.85% |
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 1.39%, CVS perfoms like the industry average, outperforming 56.31% of the companies in the same industry.
CVS's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 2.88%, CVS is in line with its industry, outperforming 52.43% of the companies in the same industry.
In the last couple of years the Operating Margin of CVS has declined.
The Gross Margin of CVS (14.05%) is worse than 68.93% of its industry peers.
CVS's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.88% | ||
| PM (TTM) | 1.39% | ||
| GM | 14.05% |
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
CVS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for CVS has been reduced compared to 1 year ago.
Compared to 5 years ago, CVS has less shares outstanding
Compared to 1 year ago, CVS has a worse debt to assets ratio.
2.2 Solvency
CVS has an Altman-Z score of 2.19. This is not the best score and indicates that CVS is in the grey zone with still only limited risk for bankruptcy at the moment.
CVS has a Altman-Z score (2.19) which is in line with its industry peers.
CVS has a debt to FCF ratio of 10.89. This is a negative value and a sign of low solvency as CVS would need 10.89 years to pay back of all of its debts.
CVS has a Debt to FCF ratio of 10.89. This is comparable to the rest of the industry: CVS outperforms 47.57% of its industry peers.
A Debt/Equity ratio of 0.78 indicates that CVS is somewhat dependend on debt financing.
CVS has a Debt to Equity ratio of 0.78. This is comparable to the rest of the industry: CVS outperforms 44.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 10.89 | ||
| Altman-Z | 2.19 |
ROIC/WACC0.64
WACC7.59%
2.3 Liquidity
A Current Ratio of 0.82 indicates that CVS may have some problems paying its short term obligations.
CVS has a worse Current ratio (0.82) than 78.64% of its industry peers.
CVS has a Quick Ratio of 0.82. This is a bad value and indicates that CVS is not financially healthy enough and could expect problems in meeting its short term obligations.
CVS's Quick ratio of 0.63 is on the low side compared to the rest of the industry. CVS is outperformed by 82.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
The earnings per share for CVS have decreased strongly by -18.98% 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.
Looking at the last year, CVS shows a small growth in Revenue. The Revenue has grown by 4.99% in the last year.
CVS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.74% yearly.
EPS 1Y (TTM)-18.98%
EPS 3Y-13.62%
EPS 5Y-5.2%
EPS Q2Q%71.76%
Revenue 1Y (TTM)4.99%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%6.96%
3.2 Future
CVS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.97% yearly.
CVS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.43% yearly.
EPS Next Y14.3%
EPS Next 2Y14.46%
EPS Next 3Y14.15%
EPS Next 5Y12.97%
Revenue Next Year4.15%
Revenue Next 2Y4.09%
Revenue Next 3Y4.71%
Revenue Next 5Y4.43%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
CVS is valuated reasonably with a Price/Earnings ratio of 10.60.
Compared to the rest of the industry, the Price/Earnings ratio of CVS indicates a rather cheap valuation: CVS is cheaper than 88.35% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.45, CVS is valued rather cheaply.
With a Price/Forward Earnings ratio of 9.50, the valuation of CVS can be described as very reasonable.
Based on the Price/Forward Earnings ratio, CVS is valued cheaply inside the industry as 87.38% of the companies are valued more expensively.
CVS is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.6 | ||
| Fwd PE | 9.5 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CVS indicates a somewhat cheap valuation: CVS is cheaper than 78.64% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.36 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
CVS's earnings are expected to grow with 14.15% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.74
PEG (5Y)N/A
EPS Next 2Y14.46%
EPS Next 3Y14.15%
5. Dividend
5.1 Amount
CVS has a Yearly Dividend Yield of 3.94%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.42, CVS pays a better dividend. On top of this CVS pays more dividend than 98.06% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, CVS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.94% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.72%
Div Incr Years3
Div Non Decr Years28
5.3 Sustainability
CVS pays out 63.88% of its income as dividend. This is not a sustainable payout ratio.
The dividend of CVS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP63.88%
EPS Next 2Y14.46%
EPS Next 3Y14.15%
67.43
+0.83 (+1.25%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners87.33%
Inst Owner Change-54.82%
Ins Owners0.99%
Ins Owner Change7.41%
Market Cap85.30B
Analysts77.58
Price Target80.12 (18.82%)
Short Float %1.5%
Short Ratio2.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.94% |
Yearly Dividend2.65
Dividend Growth(5Y)5.72%
DP63.88%
Div Incr Years3
Div Non Decr Years28
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)29.01%
Min EPS beat(2)27.26%
Max EPS beat(2)30.76%
EPS beat(4)3
Avg EPS beat(4)8.58%
Min EPS beat(4)-28.4%
Max EPS beat(4)30.76%
EPS beat(8)6
Avg EPS beat(8)2.83%
EPS beat(12)10
Avg EPS beat(12)3.55%
EPS beat(16)14
Avg EPS beat(16)4.5%
Revenue beat(2)1
Avg Revenue beat(2)-0.22%
Min Revenue beat(2)-0.46%
Max Revenue beat(2)0.02%
Revenue beat(4)2
Avg Revenue beat(4)0.04%
Min Revenue beat(4)-1.27%
Max Revenue beat(4)1.87%
Revenue beat(8)5
Avg Revenue beat(8)0.44%
Revenue beat(12)9
Avg Revenue beat(12)2.18%
Revenue beat(16)13
Avg Revenue beat(16)2.08%
PT rev (1m)1.13%
PT rev (3m)10.67%
EPS NQ rev (1m)0.32%
EPS NQ rev (3m)-6.78%
EPS NY rev (1m)0.4%
EPS NY rev (3m)3.9%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)-0.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.6 | ||
| Fwd PE | 9.5 | ||
| P/S | 0.23 | ||
| P/FCF | 14.36 | ||
| P/OCF | 9.74 | ||
| P/B | 1.11 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.36
EY9.43%
EPS(NY)7.1
Fwd EY10.53%
FCF(TTM)4.7
FCFY6.96%
OCF(TTM)6.92
OCFY10.27%
SpS299.57
BVpS60.81
TBVpS-32.29
PEG (NY)0.74
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.07% | ||
| ROE | 6.86% | ||
| ROCE | 6.54% | ||
| ROIC | 4.85% | ||
| ROICexc | 5.25% | ||
| ROICexgc | 21.75% | ||
| OM | 2.88% | ||
| PM (TTM) | 1.39% | ||
| GM | 14.05% | ||
| FCFM | 1.57% |
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-Score6
Asset Turnover1.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 10.89 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 0.74% | ||
| Interest Coverage | -3.79 | ||
| Cash Conversion | N/A | ||
| Profit Quality | 112.52% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.63 | ||
| Altman-Z | 2.19 |
F-Score6
WACC7.59%
ROIC/WACC0.64
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)-18.98%
EPS 3Y-13.62%
EPS 5Y-5.2%
EPS Q2Q%71.76%
EPS Next Y14.3%
EPS Next 2Y14.46%
EPS Next 3Y14.15%
EPS Next 5Y12.97%
Revenue 1Y (TTM)4.99%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%6.96%
Revenue Next Year4.15%
Revenue Next 2Y4.09%
Revenue Next 3Y4.71%
Revenue Next 5Y4.43%
EBIT growth 1Y-19.64%
EBIT growth 3Y-12.98%
EBIT growth 5Y-4.24%
EBIT Next Year41.15%
EBIT Next 3Y19.25%
EBIT Next 5YN/A
FCF growth 1Y-65.84%
FCF growth 3Y-26.21%
FCF growth 5Y-9.45%
OCF growth 1Y-56.31%
OCF growth 3Y-20.7%
OCF growth 5Y-6.65%