CVS HEALTH CORP (CVS) Stock Fundamental Analysis
USA - NYSE:CVS - US1266501006 - Common Stock
76.69 USD
-3.91 (-4.85%)
77.0715 USD
+0.38 (+0.5%)
CVS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 101 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on CVS. 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.
Each year in the past 5 years CVS has been profitable.
In the past 5 years CVS always reported a positive cash flow from operatings.
1.2 Ratios
CVS has a Return On Assets (1.75%) which is comparable to the rest of the industry.
CVS has a Return On Equity of 5.86%. This is in the better half of the industry: CVS outperforms 63.37% of its industry peers.
CVS has a Return On Invested Capital of 4.57%. This is comparable to the rest of the industry: CVS outperforms 54.46% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CVS is below the industry average of 9.34%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.75% | ||
| ROE | 5.86% | ||
| ROIC | 4.57% |
ROA(3y)2.35%
ROA(5y)2.72%
ROE(3y)7.68%
ROE(5y)8.81%
ROIC(3y)6.22%
ROIC(5y)6.35%
1.3 Margins
CVS's Profit Margin of 1.17% is in line compared to the rest of the industry. CVS outperforms 57.43% of its industry peers.
CVS's Profit Margin has declined in the last couple of years.
CVS's Operating Margin of 2.65% is in line compared to the rest of the industry. CVS outperforms 51.49% of its industry peers.
In the last couple of years the Operating Margin of CVS has declined.
CVS has a Gross Margin of 13.82%. This is in the lower half of the industry: CVS underperforms 67.33% of its industry peers.
CVS's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.65% | ||
| PM (TTM) | 1.17% | ||
| GM | 13.82% |
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.
CVS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CVS has been reduced compared to 5 years ago.
The debt/assets ratio for CVS is higher compared to a year ago.
2.2 Solvency
CVS has an Altman-Z score of 2.23. 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 (2.23) which is in line with its industry peers.
CVS has a debt to FCF ratio of 13.91. This is a negative value and a sign of low solvency as CVS would need 13.91 years to pay back of all of its debts.
The Debt to FCF ratio of CVS (13.91) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.78 indicates that CVS is somewhat dependend on debt financing.
The Debt to Equity ratio of CVS (0.78) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 13.91 | ||
| Altman-Z | 2.23 |
ROIC/WACC0.54
WACC8.42%
2.3 Liquidity
CVS has a Current Ratio of 0.80. This is a bad value and indicates that CVS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of CVS (0.80) is worse than 84.16% of its industry peers.
A Quick Ratio of 0.62 indicates that CVS may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.62, CVS is doing worse than 85.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.87% over the past year.
The Earnings Per Share has been decreasing by -5.20% on average over the past years.
Looking at the last year, CVS shows a small growth in Revenue. The Revenue has grown by 4.20% in the last 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)7.87%
EPS 3Y-13.62%
EPS 5Y-5.2%
EPS Q2Q%46.79%
Revenue 1Y (TTM)4.2%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%7.8%
3.2 Future
The Earnings Per Share is expected to grow by 10.91% on average over the next years. This is quite good.
CVS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.71% yearly.
EPS Next Y18.7%
EPS Next 2Y15.58%
EPS Next 3Y14.55%
EPS Next 5Y10.91%
Revenue Next Year6.16%
Revenue Next 2Y5%
Revenue Next 3Y5.09%
Revenue Next 5Y4.71%
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 11.20, the valuation of CVS can be described as very reasonable.
Based on the Price/Earnings ratio, CVS is valued cheaper than 86.14% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.76, CVS is valued rather cheaply.
A Price/Forward Earnings ratio of 10.59 indicates a reasonable valuation of CVS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CVS indicates a rather cheap valuation: CVS is cheaper than 85.15% of the companies listed in the same industry.
CVS is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.63, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.2 | ||
| Fwd PE | 10.59 |
4.2 Price Multiples
CVS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CVS is cheaper than 63.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.35 | ||
| 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 14.55% in the coming years.
PEG (NY)0.6
PEG (5Y)N/A
EPS Next 2Y15.58%
EPS Next 3Y14.55%
5. Dividend
5.1 Amount
CVS has a Yearly Dividend Yield of 3.24%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.42, CVS pays a better dividend. On top of this CVS pays more dividend than 98.02% of the companies listed in the same industry.
CVS's Dividend Yield is a higher than the S&P500 average which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.24% |
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
CVS pays out 74.62% of its income as dividend. This is not a sustainable payout ratio.
The dividend of CVS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP74.62%
EPS Next 2Y15.58%
EPS Next 3Y14.55%
76.69
-3.91 (-4.85%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners88.11%
Inst Owner Change-0.18%
Ins Owners0.99%
Ins Owner Change2.43%
Market Cap97.27B
Revenue(TTM)372.81B
Net Income(TTM)4.53B
Analysts80
Price Target86.52 (12.82%)
Short Float %1.56%
Short Ratio2.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.24% |
Yearly Dividend2.65
Dividend Growth(5Y)5.72%
DP74.62%
Div Incr Years3
Div Non Decr Years28
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.87%
Min EPS beat(2)22.99%
Max EPS beat(2)30.76%
EPS beat(4)3
Avg EPS beat(4)13.15%
Min EPS beat(4)-28.4%
Max EPS beat(4)30.76%
EPS beat(8)6
Avg EPS beat(8)5.23%
EPS beat(12)10
Avg EPS beat(12)4.69%
EPS beat(16)14
Avg EPS beat(16)4.93%
Revenue beat(2)2
Avg Revenue beat(2)1.83%
Min Revenue beat(2)0.02%
Max Revenue beat(2)3.64%
Revenue beat(4)3
Avg Revenue beat(4)1.27%
Min Revenue beat(4)-0.46%
Max Revenue beat(4)3.64%
Revenue beat(8)5
Avg Revenue beat(8)0.67%
Revenue beat(12)9
Avg Revenue beat(12)2.1%
Revenue beat(16)13
Avg Revenue beat(16)2.16%
PT rev (1m)0.53%
PT rev (3m)2.71%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)-5.25%
EPS NY rev (1m)0.09%
EPS NY rev (3m)3.84%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)1.33%
Revenue NY rev (1m)0.3%
Revenue NY rev (3m)1.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.2 | ||
| Fwd PE | 10.59 | ||
| P/S | 0.25 | ||
| P/FCF | 20.35 | ||
| P/OCF | 12.85 | ||
| P/B | 1.26 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.85
EY8.93%
EPS(NY)7.24
Fwd EY9.44%
FCF(TTM)3.77
FCFY4.91%
OCF(TTM)5.97
OCFY7.78%
SpS304.84
BVpS61.01
TBVpS-31.58
PEG (NY)0.6
PEG (5Y)N/A
Graham Number96.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.75% | ||
| ROE | 5.86% | ||
| ROCE | 6.23% | ||
| ROIC | 4.57% | ||
| ROICexc | 5% | ||
| ROICexgc | 21.47% | ||
| OM | 2.65% | ||
| PM (TTM) | 1.17% | ||
| GM | 13.82% | ||
| FCFM | 1.24% |
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%
ROICexgc growth 3Y-10.65%
ROICexgc 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-Score5
Asset Turnover1.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 13.91 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 0.72% | ||
| Interest Coverage | -3.41 | ||
| Cash Conversion | N/A | ||
| Profit Quality | 105.5% | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 2.23 |
F-Score5
WACC8.42%
ROIC/WACC0.54
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)7.87%
EPS 3Y-13.62%
EPS 5Y-5.2%
EPS Q2Q%46.79%
EPS Next Y18.7%
EPS Next 2Y15.58%
EPS Next 3Y14.55%
EPS Next 5Y10.91%
Revenue 1Y (TTM)4.2%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%7.8%
Revenue Next Year6.16%
Revenue Next 2Y5%
Revenue Next 3Y5.09%
Revenue Next 5Y4.71%
EBIT growth 1Y-20.52%
EBIT growth 3Y-12.98%
EBIT growth 5Y-4.24%
EBIT Next Year40.75%
EBIT Next 3Y19.75%
EBIT Next 5Y18.23%
FCF growth 1Y-72.95%
FCF growth 3Y-26.21%
FCF growth 5Y-9.45%
OCF growth 1Y-63.11%
OCF growth 3Y-20.7%
OCF growth 5Y-6.65%
CVS HEALTH CORP / CVS FAQ
What is the fundamental rating for CVS stock?
ChartMill assigns a fundamental rating of 4 / 10 to CVS.
What is the valuation status for CVS stock?
ChartMill assigns a valuation rating of 6 / 10 to CVS HEALTH CORP (CVS). This can be considered as Fairly Valued.
What is the profitability of CVS stock?
CVS HEALTH CORP (CVS) has a profitability rating of 4 / 10.
What are the PE and PB ratios of CVS HEALTH CORP (CVS) stock?
The Price/Earnings (PE) ratio for CVS HEALTH CORP (CVS) is 11.2 and the Price/Book (PB) ratio is 1.26.
Is the dividend of CVS HEALTH CORP sustainable?
The dividend rating of CVS HEALTH CORP (CVS) is 7 / 10 and the dividend payout ratio is 74.62%.