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CVS Health Corp
CVS : NYSE : Health Care
$103.21 -0.62 | -0.60%
Today's Range: 103.14 - 104.30
Avg. Daily Volume: 4,583,800
03/31/15 - 4:02 PM ET

Financial Analysis


CVS HEALTH CORP's gross profit margin for the fourth quarter of its fiscal year 2014 has decreased when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. CVS HEALTH CORP has weak liquidity. Currently, the Quick Ratio is 0.64 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained unchanged from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q4 FY14 Q4 FY13
Net Sales ($mil)37055.032830.0
EBITDA ($mil)2811.02675.0
EBIT ($mil)2322.02217.0
Net Income ($mil)1321.01265.0


Balance Sheet Q4 FY14 Q4 FY13
Cash & Equiv. ($mil)2515.04177.0
Total Assets ($mil)74252.071526.0
Total Debt ($mil)12955.013402.0
Equity ($mil)37958.037938.0


Profitability Q4 FY14 Q4 FY13
Gross Profit Margin19.2220.7
EBITDA Margin7.588.14
Operating Margin6.276.75
Sales Turnover1.881.77
Return on Assets6.256.42
Return on Equity12.2312.12
Debt Q4 FY14 Q4 FY13
Current Ratio1.371.64
Debt/Capital0.250.26
Interest Expense135.0138.0
Interest Coverage17.216.07


Share Data Q4 FY14 Q4 FY13
Shares outstanding (mil)1140.01180.0
Div / share0.280.23
EPS1.141.05
Book value / share33.332.15
Institutional Own % n/a n/a
Avg Daily Volume4546835.04715904.0

Valuation


BUY. CVS HEALTH CORP's P/E ratio indicates a premium compared to an average of 25.24 for the Food & Staples Retailing industry and a premium compared to the S&P 500 average of 19.41. To use another comparison, its price-to-book ratio of 3.06 indicates a premium versus the S&P 500 average of 2.74 and a discount versus the industry average of 3.89. The current price-to-sales ratio is well below the S&P 500 average, but above the industry average. The valuation analysis reveals that, CVS HEALTH CORP seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CVS 25.76 Peers 25.24   CVS 14.29 Peers 12.66

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

CVS is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CVS is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CVS 17.42 Peers 20.42   CVS 0.85 Peers 1.26

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

CVS is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CVS trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CVS 3.06 Peers 3.89   CVS 5.60 Peers 12.03

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CVS is trading at a discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CVS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CVS 0.83 Peers 0.66   CVS 9.94 Peers 5.61

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CVS is trading at a premium to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

CVS has a sales growth rate that significantly exceeds its peers.

 

 

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