CVS Caremark Corp Stock Buy Recommendation Reiterated (CVS)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- CVS Caremark (NYSE: CVS) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:
  • CVS's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 10.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CVS CAREMARK CORP has improved earnings per share by 7.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CVS CAREMARK CORP increased its bottom line by earning $3.04 versus $2.61 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $3.04).
  • Net operating cash flow has significantly increased by 110.84% to $1,731.00 million when compared to the same quarter last year. In addition, CVS CAREMARK CORP has also vastly surpassed the industry average cash flow growth rate of 42.57%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Food & Staples Retailing industry average. The net income increased by 6.1% when compared to the same quarter one year prior, going from $1,064.00 million to $1,129.00 million.

CVS Caremark Corporation provides pharmacy health care services in the United States. CVS Caremark has a market cap of $63.83 billion and is part of the services sector and retail industry. The company has a P/E ratio of 14.9, below the S&P 500 P/E ratio of 17.7. Shares are up 5.9% year to date as of the close of trading on Monday.

You can view the full CVS Caremark Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE
null

If you liked this article you might like

This Is How to Avoid Becoming Amazon Roadkill

Cramer: Dominoes Are in Play Today

How Long Can This Rally Run?: Cramer's 'Mad Money' Recap (Monday 9/19/17)

Cramer: How to Avoid Being Amazon Roadkill