CVS Health Corp

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CVS : NYSE : Health Care
$81.56 | %
Today's Range: 81.31 - 83.43
Avg. Daily Volume: 8571400.0
01/20/17 - 4:00 PM ET

Financial Analysis


CVS HEALTH CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. CVS HEALTH CORP has weak liquidity. Currently, the Quick Ratio is 0.59 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 virtually unchanged only decreasing by 3.29% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)44615.038643.0
EBITDA ($mil)3498.02989.0
EBIT ($mil)2887.02457.0
Net Income ($mil)1540.01246.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)2263.03011.0
Total Assets ($mil)94156.092362.0
Total Debt ($mil)26733.027222.0
Equity ($mil)35949.037174.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin18.1718.61
EBITDA Margin7.847.73
Operating Margin6.476.36
Sales Turnover1.831.62
Return on Assets5.425.47
Return on Equity14.2113.58
Debt Q3 FY16 Q3 FY15
Current Ratio1.161.43
Debt/Capital0.430.42
Interest Expense258.0252.0
Interest Coverage11.199.75


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)1066.01110.0
Div / share0.430.35
EPS1.431.1
Book value / share33.7233.49
Institutional Own % n/a n/a
Avg Daily Volume8534804.05155959.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 23.24 for the Food & Staples Retailing industry and a discount compared to the S&P 500 average of 25.49. For additional comparison, its price-to-book ratio of 2.45 indicates a discount versus the S&P 500 average of 2.84 and a discount versus the industry average of 3.78. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, CVS HEALTH CORP proves to trade at a discount 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 17.69 Peers 23.24   CVS 7.69 Peers 9.29

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

CVS is trading at a discount to its peers.

 

Discount. 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 discount 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 14.10 Peers 18.78   CVS 0.69 Peers 2.09

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

CVS is trading at a discount to 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 2.45 Peers 3.78   CVS 5.41 Peers 0.18

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 significant discount to its peers.

 

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

CVS is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CVS 0.51 Peers 0.54   CVS 15.75 Peers 1.37

Average. 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 valuation on par with 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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