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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cvs Health Corporation (XNYS:CVS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CVS
Name:
CVS HEALTH CORPORATION (XNYS:CVS)
Sector:
2.51B
Industry:
Healthcare Plans
CEO:
Mr. Larry Merlo
Total Employees:
300,000
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 759.01% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CVS HEALTH CORPORATION(CVS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HEALTHCARE PLANS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
99.44
One Month Price Target:
$99.84
Six Month Price Target :
$101.82
Likely Price in One Year's Time:
Ticker:
$104.21
Likely Trading Range Today Under (Normal Volatility)
$99.18
Price Upper limit ($) :
$99.82
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$95.63
This week:
$90.93
This month :
$82.41
Other Primary facts
Market Cap:
129.62B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.31B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.9%
-12.31%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$117.10
$108.93
$81.78
$89.95
Medium risk (<10%) entry points
Buy Call
Sell Call
$106.27
Buy Put:
Sell Put:
$104.53
$92.59
$94.35
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CVS
Sharpe Ratio:
2.82%
Comparison:
CVS, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -28.49% lower than the industry
& ratio is 23.74% higher than the market/S&P 500 average
Average Returns/Yield of
CVS
Daily returns:
0.06%
Weekly returns:
0.31%
Monthly returns:
1.25%
Yearly returns:
24.40%
Comparison of returns:
Average annual returns/yield (last 3 years) is -38.74% below industry average
Classification:
CVS, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
CVS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.89%
Weekly Volatility:
4.24%
Monthly Volatility:
8.47%
Yearly Volatility:
29.35%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.43%
Volatility in last five trading days has been -24.71% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.83%
Weekly VaR:
-8.56%
Monthly VaR:
-17.12%
How Much Can the price of
CVS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-14%
Worst case (decline):
-59.31%
This translates to price declining to:
$85.10
This translates to price declining to:
$40.46
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CVS is a 20.84% riskier investment compared to the market/S&P 500 & is 3.52% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -18.59% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CVS
Beta in relation to market/S&P 500--0.71
Expected beta in 1 year's time:
0.69
Expected beta in 3 year's time:
0.977
Unlevered (debt free) Beta:
0.413
Beta in relation to Nasdaq (XNAS):
0.481
Beta in relation to all global stocks::
0.592
Beta Comparison & Analysis
Beta of competitors/peers::
0.849
Beta is -16.00% lower than peers
Average Industry Beta:
0.719
Beta is -0.84% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
7.07%
Sustainable growth rate is -51.65% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.069
Alpha is -57.66% below industry average alpha yield
Alpha is 440% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CVS
Equity cost of capital:
0.080
Equity cost of capital is -0.51% below industry mean WACC
Unlevered (without debt) cost of capital:
4.65%
Before-tax cost of debt:
3.20%
After-tax cost of debt:
2.53%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.53%
WACC is -7.18% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$228.39
Revenue growth rate per share of (3Y):
1.76
Annual revenue growth rate is -74.00% below industry average
EPS:
$6.02
Expected Annual growth rate of EPS (3Y):
5.27%
Expected future EPS growth rate is -49.02% lower than the Healthcare Plans industry
Free cash flow (FCF) per share:
$12.17
Balance sheet equity growth per share: 1.79%
Equity growth rate per share is -86.45% lower than the industry
Debt per share
$53.20
EBITDA per share
$12.31
Valuation Analysis Today of
CVS
P/E Ratio:
16.16
P/E Ratio of Competitors/Peers:
76.8
P/E ratio is -78.96% lower than main peers & is -26.43% lower than the industry
Stock price/value with industry average P/E ratio: $132.24
CVS is -24.80% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $60.20
Present value of the expected future dividends only: $30.14
P/S (Price to Sales ratio):
0.44
Price to sales ratio is -43.98% below the industry mean
P/B (Price to book value ratio):
1.76
Price to free cash flow: 8.17
-
Net income growth rate (3Y):
-1150.82%
Net income growth rate is 1327.55% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 9.04%
Dividend yeild: 2.11%
Previous Dividend: $0.55
Previous adjusted dividend: $0.55
Previous Dividend: $2.10
Expected next dividend best case: $0.57
Expected next dividend worst case: $0.53
Average dividend payment (long-term): $0.51
Average dividend increase/decrease (growth rate) % per period: 1.00%
Expected next dividend payment date: 08/01/2022
Expected next dividend record date: 21/07/2022
Expected next dividend declaration date: 06/07/2022
Previous dividend payment date: 05/02/2022
Previous dividend record date: 22/04/2022
Previous dividend declaration date: 03/09/2022
Dividend History:
2022-04-21--$0.55
2021-10-21--$0.50
2021-04-22--$0.50
2022-01-20--$0.55
2021-07-22--$0.50
2021-01-21--$0.50
Dividend growth rate is -70.26% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
94.61%
Net debt to equity ratio:
91.39%
Debt to assets ratio:
29.99%
Net debt to assets ratio:
28.97%
Debt-to-asset ratio is -53.54% below industry average
Ability to repay debt:
Interest coverage ratio:
6.64
Interest coverage ratio is 124.75% more than industry average
Looking forward:
Debt growth rate:
9.67%
Annual debt growth is -98% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.02%
Analysis of Key Statistics
Correlation of price movement with the market:
0.605
Statistical significance of correlation:
CVS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.624
Stock price is -3.07% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.624
Correlation of price movement with Nasdaq (^IXIC):
0.049
Covariance of price movement with the market:
0.053
Kurtosis
8.007
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.142
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CVS
Gross Profit Margin Ratio:
92%
Operating Profit Margin Ratio:
4.37%
Operating profit margin is -247.45% lower than the industry
Net Profit Margin Ratio:
92%
Effective Tax Rate:
23.17%
Effective tax rate is 39.22% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.82%
Return on equity (ROE) is -226.42% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.43%
Return on assets (ROA) is -188.92% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
0.88
Current ratio is -46.78% below industry average
Cash Conversion Cycle (days):
17.2
Cash conversion cycle is -93.51% below industry average
The remaining useful life of property plant & equipment is: 2.9 years
Stock based compensation to net income ratio:
1.11%
In-depth Efficiency Analysis
Revenue generated per employee:
999.5K
Each employee generates -34% less revenue than industry average revenue per employee
EBITDA generated per employee:
53.9K
Each employee generates -31% less EBITDA than industry average revenue per employee
Profit generated per employee:
26.6K
Each employee generates -36% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
8.4K
Each employee generates -39% less free cash flow than industry average revenue per employee
Assets/Capital per employee
571.3K
Each employee generates -39% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CVS
BRISTOL-MYERS SQUIBB COMPANY (XNYS:BMY)
MEDTRONIC PUBLIC LIMITED COMPANY (XNYS:MDT)
GSK PLC (XNYS:GSK)
ZOETIS INC. (XNYS:ZTS)
STRYKER CORPORATION (XNYS:SYK)
ASTRAZENECA PLC (XNAS:AZN)
HCA HEALTHCARE, INC. (XNYS:HCA)
CIGNA CORPORATION (XNYS:CI)
EDWARDS LIFESCIENCES CORPORATION (XNYS:EW)
Current Analyst Ratings
Strong buy�21%
Buy�42%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
299.84B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
230.35B
69.49B
-
-
-
-
38.02B
38.02B
-
2.43B
3.33B
16.16B
13.11B
7.99B
10.40B
2.41B
7.99B
Statement of Cash Flow
Date:
Period:
1.06B
Differed Income Tax :
- 187000.00K
Stock Based Compensation :
89.00M
Change in Working Capital :
293.00M
Accounts Receivables:
- 1967000.00K
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
3.56B
Investments in PP&E:
- 1051000.00K
Net Acquisitions:
- 7000.00K
Purchases of Investments:
- 3474000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
8.44B
2.90B
11.34B
26.45B
18.16B
5.53B
61.48B
31.65B
79.06B
28.54B
22.60B
-
9.55B
171.39B
-
232.87B
12.74B
6.07B
-
-
50.98B
69.78B
69.85B
13.28B
88.95B
-
158.73B
47.68B
56.49B
- 190000.0K
- 30145000.00K
March 31, 2022 at 6:00:00 AM
268.37B
73.83B
232.56B
25.50B
75.92B
67.5B
2.57B
- 31000.00K
- 1993000.00K
- 14000.00K
-
- 2000000.00K
- 722000.00K
86.00M
- 2650000.00K
-
- 1080000.00K
11.61B
12.69B
3.56B
- 1051000.00K
2.51B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
CVS
2023
2024
2025
2026
2027
$104.73
$222.59
$233.26
$244.44
$256.16