CVS HEALTH CORP (CVS) Stock Fundamental Analysis
NYSE:CVS - New York Stock Exchange, Inc. - US1266501006 - Common Stock - Currency: USD
CVS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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 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
CVS has a Return On Assets of 2.07%. This is comparable to the rest of the industry: CVS outperforms 56.31% of its industry peers.
CVS has a better Return On Equity (6.86%) than 66.99% of its industry peers.
CVS has a Return On Invested Capital (4.85%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years 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 has a Profit Margin (1.39%) which is in line with its industry peers.
CVS's Profit Margin has declined in the last couple of years.
CVS has a Operating Margin of 2.88%. This is comparable to the rest of the industry: CVS outperforms 52.43% of its industry peers.
CVS's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 14.05%, CVS is not doing good in the industry: 68.93% of the companies in the same industry are doing better.
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.
The number of shares outstanding for CVS has been reduced compared to 1 year ago.
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 2.18. 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.
The Altman-Z score of CVS (2.18) is comparable to the rest of the 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.
Looking at the Debt to FCF ratio, with a value of 10.89, CVS is in line with its industry, outperforming 47.57% of the companies in the same 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 in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 10.89 | ||
| Altman-Z | 2.18 |
ROIC/WACC0.65
WACC7.45%
2.3 Liquidity
CVS has a Current 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 Current ratio of 0.82 is on the low side compared to the rest of the industry. CVS is outperformed by 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 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
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.
CVS shows a small growth in Revenue. In the last year, the Revenue has grown by 4.99%.
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
Based on estimates for the next years, CVS will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.97% on average per year.
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
A Price/Earnings ratio of 10.19 indicates a reasonable valuation of CVS.
Compared to the rest of the industry, the Price/Earnings ratio of CVS indicates a rather cheap valuation: CVS is cheaper than 90.29% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.30, CVS is valued rather cheaply.
With a Price/Forward Earnings ratio of 9.12, 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 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.19 | ||
| Fwd PE | 9.12 |
4.2 Price Multiples
78.64% 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 | 13.79 | ||
| 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)0.71
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 2.43, 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 2.37.
| 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 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.
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%
64.78
-0.84 (-1.28%)
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 Cap81.95B
Analysts77.58
Price Target80.12 (23.68%)
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 | 10.19 | ||
| Fwd PE | 9.12 | ||
| P/S | 0.22 | ||
| P/FCF | 13.79 | ||
| P/OCF | 9.35 | ||
| P/B | 1.07 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.36
EY9.82%
EPS(NY)7.1
Fwd EY10.96%
FCF(TTM)4.7
FCFY7.25%
OCF(TTM)6.92
OCFY10.69%
SpS299.57
BVpS60.81
TBVpS-32.29
PEG (NY)0.71
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
WACC7.45%
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%