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 valued quite cheap, but it does not seem to be growing. Finally 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.
The Return On Equity of CVS (6.86%) is better than 64.71% of its industry peers.
CVS has a Return On Invested Capital (4.85%) which 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 9.53%.
| 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.
In the last couple of years the Profit Margin of CVS has declined.
CVS has a Operating Margin (2.88%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of CVS has declined.
With a Gross Margin value of 14.05%, CVS is not doing good in the industry: 67.65% 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
CVS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for CVS has been reduced compared to 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
An Altman-Z score of 2.16 indicates that CVS is not a great score, but indicates only limited risk for bankruptcy at the moment.
CVS has a Altman-Z score (2.16) which is comparable to the rest of the industry.
The Debt to FCF ratio of CVS is 10.89, which is on the high side as it means it would take CVS, 10.89 years of fcf income to pay off 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 46.08% 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.
Looking at the Debt to Equity ratio, with a value of 0.78, CVS is in line with its industry, outperforming 45.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 10.89 | ||
| Altman-Z | 2.16 |
ROIC/WACC0.66
WACC7.32%
2.3 Liquidity
A Current Ratio of 0.82 indicates that CVS may have some problems paying its short term obligations.
CVS has a worse Current ratio (0.82) than 81.37% 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.
With a Quick ratio value of 0.63, CVS is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
| 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.
CVS shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -5.20% yearly.
Looking at the last year, CVS shows a small growth in Revenue. The Revenue has grown by 4.99% in the last year.
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
The Earnings Per Share is expected to grow by 12.74% 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 4.22% yearly.
EPS Next Y13.84%
EPS Next 2Y14.3%
EPS Next 3Y14.14%
EPS Next 5Y12.74%
Revenue Next Year4.04%
Revenue Next 2Y4.09%
Revenue Next 3Y4.74%
Revenue Next 5Y4.22%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.02, the valuation of CVS can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of CVS indicates a rather cheap valuation: CVS is cheaper than 93.14% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of CVS to the average of the S&P500 Index (26.60), we can say CVS is valued rather cheaply.
CVS is valuated reasonably with a Price/Forward Earnings ratio of 9.00.
CVS's Price/Forward Earnings ratio is rather cheap when compared to the industry. CVS is cheaper than 90.20% of the companies in the same industry.
CVS is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.02 | ||
| Fwd PE | 9 |
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 | 13.54 | ||
| 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)0.72
PEG (5Y)N/A
EPS Next 2Y14.3%
EPS Next 3Y14.14%
5. Dividend
5.1 Amount
CVS has a Yearly Dividend Yield of 4.40%, 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 2.36, CVS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.4% |
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
CVS pays out 63.88% 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.
DP63.88%
EPS Next 2Y14.3%
EPS Next 3Y14.14%
63.74
+0.96 (+1.53%)
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 Change5.12%
Market Cap80.46B
Analysts76.36
Price Target79.23 (24.3%)
Short Float %1.32%
Short Ratio1.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.4% |
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)9.43%
PT rev (3m)20.88%
EPS NQ rev (1m)-7.21%
EPS NQ rev (3m)-8.72%
EPS NY rev (1m)3.47%
EPS NY rev (3m)3.9%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.11%
Revenue NY rev (1m)-0.6%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.02 | ||
| Fwd PE | 9 | ||
| P/S | 0.21 | ||
| P/FCF | 13.54 | ||
| P/OCF | 9.19 | ||
| P/B | 1.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)6.36
EY9.98%
EPS(NY)7.08
Fwd EY11.11%
FCF(TTM)4.71
FCFY7.38%
OCF(TTM)6.94
OCFY10.89%
SpS300.19
BVpS60.94
TBVpS-32.35
PEG (NY)0.72
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 | 2.16 |
F-Score6
WACC7.32%
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 5Y12.74%
Revenue 1Y (TTM)4.99%
Revenue growth 3Y8.47%
Revenue growth 5Y7.74%
Sales Q2Q%6.96%
Revenue Next Year4.04%
Revenue Next 2Y4.09%
Revenue Next 3Y4.74%
Revenue Next 5Y4.22%
EBIT growth 1Y-19.64%
EBIT growth 3Y-12.98%
EBIT growth 5Y-4.24%
EBIT Next Year40.63%
EBIT Next 3Y19.8%
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%