CVS HEALTH CORP (CVS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CVS - US1266501006 - Common Stock
72.83 USD
+0.83 (+1.15%)
Overall CVS gets a fundamental rating of 4 out of 10. We evaluated CVS against 103 industry peers in the Health Care Providers & Services industry. CVS may be in some trouble as it scores bad on both profitability and health. CVS is valued quite cheap, while showing a decent growth score. This is a good combination! 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.
- In the past 5 years CVS has always been profitable.
- In the past 5 years CVS always reported a positive cash flow from operatings.
1.2 Ratios
- CVS's Return On Assets of 0.18% is in line compared to the rest of the industry. CVS outperforms 49.51% of its industry peers.
- Looking at the Return On Equity, with a value of 0.64%, CVS is in line with its industry, outperforming 54.37% of the companies in the same industry.
- CVS has a Return On Invested Capital (4.90%) which is in line with its industry peers.
- CVS had an Average Return On Invested Capital over the past 3 years of 6.22%. This is below the industry average of 9.21%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.18% | ||
| ROE | 0.64% | ||
| ROIC | 4.9% |
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
- CVS has a Profit Margin of 0.12%. This is comparable to the rest of the industry: CVS outperforms 49.51% of its industry peers.
- CVS's Profit Margin has declined in the last couple of years.
- With a Operating Margin value of 2.73%, CVS perfoms like the industry average, outperforming 54.37% of the companies in the same industry.
- CVS's Operating Margin has declined in the last couple of years.
- CVS has a Gross Margin of 13.88%. This is in the lower half of the industry: CVS underperforms 66.99% of its industry peers.
- In the last couple of years the Gross Margin of CVS has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.73% | ||
| PM (TTM) | 0.12% | ||
| GM | 13.88% |
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-4.91%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CVS is destroying value.
- The number of shares outstanding for CVS has been reduced compared to 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
- CVS has an Altman-Z score of 2.23. 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 (2.23) which is comparable to the rest of the industry.
- CVS has a debt to FCF ratio of 10.46. This is a negative value and a sign of low solvency as CVS would need 10.46 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 10.46, CVS is in line with its industry, outperforming 44.66% of the companies in the same industry.
- A Debt/Equity ratio of 0.85 indicates that CVS is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.85, CVS perfoms like the industry average, outperforming 46.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 10.46 | ||
| Altman-Z | 2.23 |
ROIC/WACC0.61
WACC8.05%
2.3 Liquidity
- CVS has a Current Ratio of 0.83. This is a bad value and indicates that CVS is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.83, CVS is not doing good in the industry: 81.55% of the companies in the same industry are doing better.
- CVS has a Quick Ratio of 0.83. This is a bad value and indicates that CVS is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.63, CVS is doing worse than 80.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
- CVS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.87%.
- 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 6.82%.
- CVS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.74% yearly.
EPS 1Y (TTM)7.87%
EPS 3Y-13.62%
EPS 5Y-5.2%
EPS Q2Q%46.79%
Revenue 1Y (TTM)6.82%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%7.8%
3.2 Future
- The Earnings Per Share is expected to grow by 13.81% 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 4.65% yearly.
EPS Next Y23.97%
EPS Next 2Y15.58%
EPS Next 3Y15.17%
EPS Next 5Y13.81%
Revenue Next Year7.59%
Revenue Next 2Y5.06%
Revenue Next 3Y5.17%
Revenue Next 5Y4.65%
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
- Based on the Price/Earnings ratio of 10.63, the valuation of CVS can be described as reasonable.
- 88.35% of the companies in the same industry are more expensive than CVS, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 28.82, CVS is valued rather cheaply.
- With a Price/Forward Earnings ratio of 10.06, the valuation of CVS can be described as very reasonable.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CVS indicates a rather cheap valuation: CVS is cheaper than 87.38% of the companies listed in the same industry.
- CVS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.63 | ||
| Fwd PE | 10.06 |
4.2 Price Multiples
- 76.70% of the companies in the same industry are more expensive than CVS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.69 | ||
| 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.
- A more expensive valuation may be justified as CVS's earnings are expected to grow with 15.17% in the coming years.
PEG (NY)0.44
PEG (5Y)N/A
EPS Next 2Y15.58%
EPS Next 3Y15.17%
5. Dividend
5.1 Amount
- CVS has a Yearly Dividend Yield of 3.22%.
- Compared to an average industry Dividend Yield of 0.45, CVS pays a better dividend. On top of this CVS pays more dividend than 98.06% of the companies listed in the same industry.
- CVS's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.22% |
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 722.81% 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.
DP722.81%
EPS Next 2Y15.58%
EPS Next 3Y15.17%
CVS HEALTH CORP / CVS FAQ
What is the fundamental rating for CVS stock?
ChartMill assigns a fundamental rating of 4 / 10 to CVS.
What is the valuation status of CVS HEALTH CORP (CVS) stock?
ChartMill assigns a valuation rating of 7 / 10 to CVS HEALTH CORP (CVS). This can be considered as Undervalued.
What is the profitability of CVS stock?
CVS HEALTH CORP (CVS) has a profitability rating of 3 / 10.
Can you provide the expected EPS growth for CVS stock?
The Earnings per Share (EPS) of CVS HEALTH CORP (CVS) is expected to grow by 23.97% in the next year.
Can you provide the dividend sustainability for CVS stock?
The dividend rating of CVS HEALTH CORP (CVS) is 7 / 10 and the dividend payout ratio is 722.81%.