CVS HEALTH CORP (CVS.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:CVS - US1266501006 - Common Stock
69.545 EUR
-0.11 (-0.17%)
Overall CVS gets a fundamental rating of 4 out of 10. We evaluated CVS against 30 industry peers in the Health Care Providers & Services industry. CVS has a bad profitability rating. Also its financial health evaluation is rather negative. CVS has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year CVS was profitable.
- CVS had a positive operating cash flow in the past year.
- CVS had positive earnings in each of the past 5 years.
- Each year in the past 5 years CVS had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of CVS (0.18%) is worse than 70.00% of its industry peers.
- CVS has a Return On Equity of 0.64%. This is in the lower half of the industry: CVS underperforms 73.33% of its industry peers.
- CVS has a Return On Invested Capital (4.90%) which is in line with its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CVS is in line with the industry average of 6.46%.
| 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
- With a Profit Margin value of 0.12%, CVS is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
- In the last couple of years the Profit Margin of CVS has declined.
- With a Operating Margin value of 2.73%, CVS is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
- CVS's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 13.88%, CVS is doing worse than 63.33% of the companies in the same industry.
- CVS's Gross Margin has declined in the last couple of years.
| 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CVS 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
- The debt/assets ratio for CVS is higher compared to a year ago.
2.2 Solvency
- CVS has an Altman-Z score of 2.27. 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.
- With a decent Altman-Z score value of 2.27, CVS is doing good in the industry, outperforming 63.33% of the companies in the same industry.
- The Debt to FCF ratio of CVS is 10.46, which is on the high side as it means it would take CVS, 10.46 years of fcf income to pay off all of its debts.
- CVS has a Debt to FCF ratio of 10.46. This is comparable to the rest of the industry: CVS outperforms 46.67% of its industry peers.
- CVS has a Debt/Equity ratio of 0.85. This is a neutral value indicating CVS is somewhat dependend on debt financing.
- CVS's Debt to Equity ratio of 0.85 is in line compared to the rest of the industry. CVS outperforms 53.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 10.46 | ||
| Altman-Z | 2.27 |
ROIC/WACC0.61
WACC8.06%
2.3 Liquidity
- A Current Ratio of 0.83 indicates that CVS may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.83, CVS is doing worse than 60.00% of the companies in the same industry.
- A Quick Ratio of 0.63 indicates that CVS may have some problems paying its short term obligations.
- CVS has a Quick ratio of 0.63. This is in the lower half of the industry: CVS underperforms 66.67% of its industry peers.
| 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.
- The Revenue has been growing slightly by 6.82% in the past year.
- The Revenue has been growing slightly by 7.74% on average over the past years.
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.
- The Revenue is expected to grow by 4.65% on average over the next years.
EPS Next Y23.97%
EPS Next 2Y15.58%
EPS Next 3Y15.14%
EPS Next 5Y13.81%
Revenue Next Year7.58%
Revenue Next 2Y5.09%
Revenue Next 3Y5.2%
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.
- 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 11.89, which indicates a very decent valuation of CVS.
- Based on the Price/Earnings ratio, CVS is valued a bit cheaper than 80.00% of the companies in the same industry.
- When comparing the Price/Earnings ratio of CVS to the average of the S&P500 Index (27.21), we can say CVS is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 11.24, the valuation of CVS can be described as reasonable.
- 76.67% of the companies in the same industry are more expensive than CVS, based on the Price/Forward Earnings ratio.
- CVS is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.89 | ||
| Fwd PE | 11.24 |
4.2 Price Multiples
- The rest of the industry has a similar Price/Free Cash Flow ratio as CVS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.42 | ||
| 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 15.14% in the coming years.
PEG (NY)0.5
PEG (5Y)N/A
EPS Next 2Y15.58%
EPS Next 3Y15.14%
5. Dividend
5.1 Amount
- CVS has a Yearly Dividend Yield of 3.27%. Purely for dividend investing, there may be better candidates out there.
- CVS's Dividend Yield is rather good when compared to the industry average which is at 1.73. CVS pays more dividend than 93.33% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, CVS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
5.2 History
- The dividend of CVS has a limited annual growth rate of 5.72%.
Dividend Growth(5Y)5.72%
Div Incr Years3
Div Non Decr Years5
5.3 Sustainability
- 722.81% 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.
DP722.81%
EPS Next 2Y15.58%
EPS Next 3Y15.14%
CVS HEALTH CORP / CVS.DE FAQ
What is the fundamental rating for CVS stock?
ChartMill assigns a fundamental rating of 4 / 10 to CVS.DE.
What is the valuation status of CVS HEALTH CORP (CVS.DE) stock?
ChartMill assigns a valuation rating of 6 / 10 to CVS HEALTH CORP (CVS.DE). This can be considered as Fairly Valued.
What is the profitability of CVS stock?
CVS HEALTH CORP (CVS.DE) 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.DE) 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.DE) is 6 / 10 and the dividend payout ratio is 722.81%.