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. There are concerns on the financial health of CVS while its profitability can be described as average. CVS is valued quite cheap, but it does not seem to be growing. CVS also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
CVS had positive earnings in the past year.
In the past year CVS had a positive cash flow from operations.
Each year in the past 5 years CVS has been profitable.
CVS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CVS has a Return On Assets (2.07%) which is in line with its industry peers.
CVS has a better Return On Equity (6.86%) than 66.67% of its industry peers.
CVS's Return On Invested Capital of 4.85% is in line compared to the rest of the industry. CVS outperforms 53.92% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CVS is below the industry average of 9.62%.
| 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
With a Profit Margin value of 1.39%, CVS perfoms like the industry average, outperforming 55.88% of the companies in the same industry.
CVS's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 2.88%, CVS is in line with its industry, outperforming 51.96% of the companies in the same industry.
CVS's Operating Margin has declined in the last couple of years.
CVS's Gross Margin of 14.05% is on the low side compared to the rest of the industry. CVS is outperformed by 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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
An Altman-Z score of 2.19 indicates that CVS is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.19, CVS perfoms like the industry average, outperforming 52.94% 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 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 46.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 10.89 | ||
| Altman-Z | 2.19 |
ROIC/WACC0.64
WACC7.55%
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.
Looking at the Current ratio, with a value of 0.82, CVS is doing worse than 77.45% of the companies in the same industry.
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
The earnings per share for CVS have decreased strongly by -18.98% in the last year.
The Earnings Per Share has been decreasing by -5.20% on average over the past years.
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
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
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
CVS is valuated reasonably with a Price/Earnings ratio of 10.61.
Based on the Price/Earnings ratio, CVS is valued cheaply inside the industry as 90.20% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of CVS to the average of the S&P500 Index (26.32), we can say CVS is valued rather cheaply.
With a Price/Forward Earnings ratio of 9.53, 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 88.24% 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 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.61 | ||
| Fwd PE | 9.53 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, CVS is valued a bit cheaper than the industry average as 79.41% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.36 | ||
| 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 14.14% in the coming years.
PEG (NY)0.77
PEG (5Y)N/A
EPS Next 2Y14.3%
EPS Next 3Y14.14%
5. Dividend
5.1 Amount
CVS has a Yearly Dividend Yield of 4.01%, which is a nice return.
CVS's Dividend Yield is rather good when compared to the industry average which is at 2.41. CVS pays more dividend than 98.04% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, CVS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.01% |
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
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%
67.46
+1.11 (+1.67%)
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 Change3.47%
Ins Owners0.99%
Ins Owner Change7.48%
Market Cap85.34B
Analysts77.58
Price Target80.25 (18.96%)
Short Float %1.27%
Short Ratio1.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.01% |
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)-0.68%
EPS NQ rev (3m)-7.58%
EPS NY rev (1m)0%
EPS NY rev (3m)3.38%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-0.21%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.61 | ||
| Fwd PE | 9.53 | ||
| P/S | 0.23 | ||
| P/FCF | 14.36 | ||
| P/OCF | 9.74 | ||
| P/B | 1.11 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.36
EY9.43%
EPS(NY)7.08
Fwd EY10.5%
FCF(TTM)4.7
FCFY6.96%
OCF(TTM)6.92
OCFY10.27%
SpS299.57
BVpS60.81
TBVpS-32.29
PEG (NY)0.77
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 | 2.19 |
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 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%