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. CVS has a medium profitability rating, but doesn't score so well on its financial health evaluation. CVS is valued quite cheap, but it does not seem to be growing. Finally 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.
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
CVS has a Return On Assets (2.07%) which is comparable to the rest of the 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 (4.85%) 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 9.71%.
| 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
Looking at the Profit Margin, with a value of 1.39%, CVS is in line with its industry, outperforming 56.31% of the companies in the same industry.
In the last couple of years the Profit Margin of CVS has declined.
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.
Looking at the Gross Margin, with a value of 14.05%, CVS is doing worse than 68.93% of the companies in the same industry.
In the last couple of years the Gross Margin of CVS has declined.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CVS is destroying value.
Compared to 1 year ago, CVS has less shares outstanding
CVS has less shares outstanding than it did 5 years ago.
CVS has a worse debt/assets ratio than last year.
2.2 Solvency
CVS has an Altman-Z score of 2.17. 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 (2.17) 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.
The Debt to FCF ratio of CVS (10.89) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.78 indicates that CVS is somewhat dependend on debt financing.
CVS's Debt to Equity ratio of 0.78 is in line compared 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 | 2.17 |
ROIC/WACC0.64
WACC7.55%
2.3 Liquidity
A Current Ratio of 0.82 indicates that CVS may have some problems paying its short term obligations.
CVS has a Current ratio of 0.82. This is in the lower half of the industry: CVS underperforms 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 has a Quick ratio of 0.63. This is amonst the worse of the industry: CVS underperforms 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.
Measured over the past years, CVS shows a decrease in Earnings Per Share. The EPS has been decreasing by -5.20% on average per year.
The Revenue has been growing slightly by 4.99% in the past 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.
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 2Y14.4%
EPS Next 3Y14.23%
EPS Next 5Y12.97%
Revenue Next Year4.09%
Revenue Next 2Y4.05%
Revenue Next 3Y4.72%
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.
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
With a Price/Earnings ratio of 9.74, the valuation of CVS can be described as very reasonable.
CVS's Price/Earnings ratio is rather cheap when compared to the industry. CVS is cheaper than 89.32% of the companies in the same industry.
CVS is valuated cheaply when we compare the Price/Earnings ratio to 27.50, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 8.74, the valuation of CVS can be described as reasonable.
Based on the Price/Forward Earnings ratio, CVS is valued cheaper than 86.41% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.44, CVS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.74 | ||
| Fwd PE | 8.74 |
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 | 13.19 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
CVS's 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 14.23% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.68
PEG (5Y)N/A
EPS Next 2Y14.4%
EPS Next 3Y14.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.05%, CVS is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.51, 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 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
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
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 2Y14.4%
EPS Next 3Y14.23%
61.96
-1.34 (-2.12%)
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 Cap78.38B
Analysts77.58
Price Target80.12 (29.31%)
Short Float %1.28%
Short Ratio1.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
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)-0.16%
PT rev (3m)10.67%
EPS NQ rev (1m)0.4%
EPS NQ rev (3m)-7.48%
EPS NY rev (1m)0.41%
EPS NY rev (3m)3.9%
Revenue NQ rev (1m)-0.22%
Revenue NQ rev (3m)-0.41%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.74 | ||
| Fwd PE | 8.74 | ||
| P/S | 0.21 | ||
| P/FCF | 13.19 | ||
| P/OCF | 8.95 | ||
| P/B | 1.02 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.36
EY10.26%
EPS(NY)7.09
Fwd EY11.45%
FCF(TTM)4.7
FCFY7.58%
OCF(TTM)6.92
OCFY11.18%
SpS299.57
BVpS60.81
TBVpS-32.29
PEG (NY)0.68
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 | 2.17 |
F-Score6
WACC7.55%
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 2Y14.4%
EPS Next 3Y14.23%
EPS Next 5Y12.97%
Revenue 1Y (TTM)4.99%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%6.96%
Revenue Next Year4.09%
Revenue Next 2Y4.05%
Revenue Next 3Y4.72%
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%