CVS Health Corp

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CVS : NYSE : Health Care
$89.37 -0.18 | -0.20%
Today's Range: 88.46 - 89.91
Avg. Daily Volume: 4,765,200
09/30/16 - 11:19 AM ET

Financial Analysis


CVS HEALTH CORP's gross profit margin for the second quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. 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 decreased by 6.37% 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 FY16 Q2 FY15
Net Sales ($mil)43725.037169.0
EBITDA ($mil)3056.02771.0
EBIT ($mil)2437.02283.0
Net Income ($mil)924.01272.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1207.01404.0
Total Assets ($mil)92748.074668.0
Total Debt ($mil)28636.013145.0
Equity ($mil)34760.037127.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin17.4718.54
EBITDA Margin6.987.45
Operating Margin5.576.14
Sales Turnover1.81.95
Return on Assets5.196.37
Return on Equity13.8212.82
Debt Q2 FY16 Q2 FY15
Current Ratio1.111.3
Debt/Capital0.450.26
Interest Expense284.0136.0
Interest Coverage8.5816.79


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1065.01118.0
Div / share0.430.35
EPS0.861.12
Book value / share32.6433.21
Institutional Own % n/a n/a
Avg Daily Volume4866131.04863405.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 20.79 for the Food & Staples Retailing industry and a discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 2.77 indicates valuation on par with the S&P 500 average of 2.82 and a discount versus the industry average of 3.39. 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 20.87 Peers 20.79   CVS 10.39 Peers 9.75

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.

 

Average. 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 valuation on par 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 13.79 Peers 19.13   CVS 0.78 Peers 2.00

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 2.77 Peers 3.39   CVS 4.83 Peers -9.23

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.

 

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 0.58 Peers 0.53   CVS 14.52 Peers 4.01

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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