CVS HEALTH CORP (CVS) Stock Fundamental Analysis
NYSE:CVS - New York Stock Exchange, Inc. - US1266501006 - Common Stock - Currency: USD
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. While CVS is still in line with the averages on profitability rating, there are concerns on its financial health. CVS has a bad growth rate and is valued cheaply. CVS also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year CVS was profitable.
In the past year CVS had a positive cash flow from operations.
In the past 5 years CVS has always been profitable.
Each year in the past 5 years CVS had a positive operating cash flow.
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.
Looking at the Return On Equity, with a value of 6.86%, CVS is in the better half of the industry, outperforming 66.99% of the companies in the same industry.
CVS has a Return On Invested Capital of 4.85%. This is comparable to the rest of the industry: CVS outperforms 54.37% of its industry peers.
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
CVS's Profit Margin of 1.39% is in line compared to the rest of the industry. CVS outperforms 56.31% of its industry peers.
CVS's Profit Margin has declined in the last couple of years.
CVS's Operating Margin of 2.88% is in line compared to the rest of the industry. CVS outperforms 52.43% of its industry peers.
In the last couple of years the Operating Margin of CVS has declined.
CVS has a worse Gross Margin (14.05%) 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CVS is destroying value.
CVS has less shares outstanding than it did 1 year ago.
CVS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CVS is higher compared to a year ago.
2.2 Solvency
CVS has an Altman-Z score of 2.18. 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.
Looking at the Altman-Z score, with a value of 2.18, CVS is in line with its industry, outperforming 49.51% of the companies in the same industry.
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.
The Debt to FCF ratio of CVS (10.89) is comparable to the rest of the industry.
CVS has a Debt/Equity ratio of 0.78. This is a neutral value indicating CVS is somewhat dependend on debt financing.
CVS has a Debt to Equity ratio (0.78) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 10.89 | ||
| Altman-Z | 2.18 |
ROIC/WACC0.65
WACC7.43%
2.3 Liquidity
A Current Ratio of 0.82 indicates that CVS may have some problems paying its short term obligations.
The Current ratio of CVS (0.82) is worse than 78.64% of its industry peers.
A Quick Ratio of 0.63 indicates that CVS may have some problems paying 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
CVS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.98%.
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.
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)-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.
Based on estimates for the next years, CVS will show a small growth in Revenue. The Revenue will grow by 4.43% on average per year.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
The Price/Earnings ratio is 10.48, which indicates a very decent valuation of CVS.
Based on the Price/Earnings ratio, CVS is valued cheaply inside the industry as 89.32% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.29. CVS is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 9.39, the valuation of CVS can be described as very reasonable.
Based on the Price/Forward Earnings ratio, CVS is valued cheaper than 87.38% of the companies 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 21.74.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.48 | ||
| Fwd PE | 9.39 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, CVS is valued a bit cheaper than the industry average as 78.64% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.2 | ||
| 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 14.15% in the coming years.
PEG (NY)0.73
PEG (5Y)N/A
EPS Next 2Y14.46%
EPS Next 3Y14.15%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.94%, CVS has a reasonable but not impressive dividend return.
CVS's Dividend Yield is rather good when compared to the industry average which is at 2.43. CVS pays more dividend than 98.06% of the companies in the same industry.
CVS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.37.
| 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 paid a dividend for at least 10 years, which is 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
63.88% of the earnings are spent on dividend by CVS. This is not a sustainable payout ratio.
CVS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP63.88%
EPS Next 2Y14.46%
EPS Next 3Y14.15%
66.68
-0.75 (-1.11%)
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-0.01%
Ins Owners0.99%
Ins Owner Change7.41%
Market Cap84.35B
Analysts77.58
Price Target80.12 (20.16%)
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 | 10.48 | ||
| Fwd PE | 9.39 | ||
| P/S | 0.22 | ||
| P/FCF | 14.2 | ||
| P/OCF | 9.63 | ||
| P/B | 1.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.36
EY9.54%
EPS(NY)7.1
Fwd EY10.65%
FCF(TTM)4.7
FCFY7.04%
OCF(TTM)6.92
OCFY10.39%
SpS299.57
BVpS60.81
TBVpS-32.29
PEG (NY)0.73
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 | 2.18 |
F-Score6
WACC7.43%
ROIC/WACC0.65
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%