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 102 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 is cheap, but on the other hand it scores bad on growth. 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.
Each year in the past 5 years CVS had a positive operating cash flow.
1.2 Ratios
The Return On Assets of CVS (2.07%) is comparable to the rest of the industry.
CVS has a Return On Equity of 6.86%. This is in the better half of the industry: CVS outperforms 66.67% of its industry peers.
The Return On Invested Capital of CVS (4.85%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for CVS is below the industry average of 9.62%.
| 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 comparable to the rest of the 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 51.96% 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 67.65% of its industry peers.
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
The number of shares outstanding for CVS has been reduced compared to 5 years ago.
Compared to 1 year ago, CVS has a worse debt to assets ratio.
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.
Looking at the Altman-Z score, with a value of 2.17, CVS is in line with its industry, outperforming 49.02% 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.
CVS has a Debt to FCF ratio (10.89) which is in line with its industry peers.
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 | 2.17 |
ROIC/WACC0.66
WACC7.35%
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 77.45% 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 worse Quick ratio (0.63) than 81.37% 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%.
The Revenue has been growing slightly by 7.74% on average over the past years.
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 Y13.84%
EPS Next 2Y14.3%
EPS Next 3Y14.14%
EPS Next 5Y12.97%
Revenue Next Year4.14%
Revenue Next 2Y4.09%
Revenue Next 3Y4.71%
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
Based on the Price/Earnings ratio of 10.04, the valuation of CVS can be described as reasonable.
CVS's Price/Earnings ratio is rather cheap when compared to the industry. CVS is cheaper than 93.14% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.53, CVS is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 9.02, the valuation of CVS can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CVS indicates a rather cheap valuation: CVS is cheaper than 89.22% 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 22.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.04 | ||
| Fwd PE | 9.02 |
4.2 Price Multiples
80.39% 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 | 13.6 | ||
| 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 14.14% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.73
PEG (5Y)N/A
EPS Next 2Y14.3%
EPS Next 3Y14.14%
5. Dividend
5.1 Amount
CVS has a Yearly Dividend Yield of 4.22%, which is a nice return.
Compared to an average industry Dividend Yield of 2.46, CVS pays a better dividend. On top of this CVS pays more dividend than 99.02% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, CVS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.22% |
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 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
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 2Y14.3%
EPS Next 3Y14.14%
63.86
+0.28 (+0.44%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners85.02%
Inst Owner Change3.47%
Ins Owners0.06%
Ins Owner Change7.43%
Market Cap80.78B
Analysts77.58
Price Target80.25 (25.67%)
Short Float %1.27%
Short Ratio1.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.22% |
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)1.29%
PT rev (3m)11.04%
EPS NQ rev (1m)-2.21%
EPS NQ rev (3m)-7.68%
EPS NY rev (1m)3.47%
EPS NY rev (3m)3.38%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-0.25%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.04 | ||
| Fwd PE | 9.02 | ||
| P/S | 0.21 | ||
| P/FCF | 13.6 | ||
| P/OCF | 9.22 | ||
| P/B | 1.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.36
EY9.96%
EPS(NY)7.08
Fwd EY11.09%
FCF(TTM)4.7
FCFY7.35%
OCF(TTM)6.92
OCFY10.84%
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 | 2.17 |
F-Score6
WACC7.35%
ROIC/WACC0.66
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 Y13.84%
EPS Next 2Y14.3%
EPS Next 3Y14.14%
EPS Next 5Y12.97%
Revenue 1Y (TTM)4.99%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%6.96%
Revenue Next Year4.14%
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%