CVS Health Corp

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CVS : NYSE : Health Care
$79.63 | %
Today's Range: 78.62 - 79.9
Avg. Daily Volume: 5033500.0
09/22/17 - 4:01 PM ET

Financial Analysis


CVS HEALTH CORP's gross profit margin for the second quarter of its fiscal year 2017 has decreased 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 0.54 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 1.77% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)45685.043725.0
EBITDA ($mil)2891.03050.0
EBIT ($mil)2268.02431.0
Net Income ($mil)1098.0924.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)2169.01207.0
Total Assets ($mil)92525.092748.0
Total Debt ($mil)26764.028636.0
Equity ($mil)34142.034760.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin16.5517.47
EBITDA Margin6.326.97
Operating Margin4.965.56
Sales Turnover1.951.8
Return on Assets5.725.19
Return on Equity15.5413.82
Debt Q2 FY17 Q2 FY16
Current Ratio1.091.11
Debt/Capital0.440.45
Interest Expense251.0284.0
Interest Coverage9.048.56


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)1015.01065.0
Div / share0.50.43
EPS1.070.86
Book value / share33.6432.64
Institutional Own % n/a n/a
Avg Daily Volume5377551.06413467.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 20.45 for the Food & Staples Retailing industry and a discount compared to the S&P 500 average of 24.93. To use another comparison, its price-to-book ratio of 2.37 indicates a discount versus the S&P 500 average of 3.11 and a significant discount versus the industry average of 3.90. 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 15.88 Peers 20.45   CVS 7.13 Peers 9.62

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 significant 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 12.53 Peers 18.45   CVS 0.80 Peers 1.47

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 significant 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 2.37 Peers 3.90   CVS 15.43 Peers 12.68

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 exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CVS 0.45 Peers 0.51   CVS 8.43 Peers 6.92

Discount. 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 discount 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 exceeds its peers.

 

 

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