January 4, 2024
Top 10 Stock CVS Caremark Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: CVS Caremark – Top 10 Stock in Employee Satisfaction Leaders in the United States
CVS Caremark is listed as a top 10 stock on January 04, 2024 in the market index Employee Focus US because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 41 (41% performer), Obermatt assesses an overall hold recommendation for CVS Caremark on January 04, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Services |
| Index | Dividends USA, Employee Focus US, Human Rights, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View CVS Caremark Hold
| 360 METRICS | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 33 |
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| SENTIMENT | ||||||||
| SENTIMENT | 54 |
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| 360° VIEW | ||||||||
| 360° VIEW | 41 |
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ANALYSIS: With an Obermatt 360° View of 41 (better than 41% compared with alternatives), overall professional sentiment and financial characteristics for the stock CVS Caremark are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for CVS Caremark. The consolidated Value Rank has an attractive rank of 98, which means that the share price of CVS Caremark is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 98% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 54, which means that professional investors are more optimistic about the stock than for 54% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 7, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 33, meaning the company has a riskier financing structure than 67 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 41, CVS Caremark is worse than 59% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 98) and positive market sentiment in the professional investor community (Sentiment Rank of 54), but growth expectations are below-average (Growth Rank of 7) and the financing structure is on the risky side(Safety Rank of 33). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of CVS Caremark is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for CVS Caremark positive
ANALYSIS: With an Obermatt Sentiment Rank of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock CVS Caremark is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for CVS Caremark. Analyst Opinions are at a rank of 44 (worse than 56% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in CVS Caremark. More encouragingly, the Professional Investors rank is 67, which means that professional investors hold more stock in this company than in 67% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 45, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 55% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 54 (more positive than 54% compared with investment alternatives), CVS Caremark has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for CVS Caremark. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: CVS Caremark Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 98 (better than 98% compared with alternatives) for 2023, CVS Caremark shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for CVS Caremark. Price-to-Sales is 82 which means that the stock price compared with what market professionals expect for future sales is lower than for 82% of comparable companies, indicating a good value for CVS Caremark's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 94% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 80. Compared with other companies in the same industry, dividend yields of CVS Caremark are expected to be higher than for 96% of all competitors (a Dividend Yield rank of 96). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 98, is a buy recommendation based on CVS Caremark's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in CVS Caremark based on its detailed value metrics.
Growth Strategy: CVS Caremark Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), CVS Caremark shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for CVS Caremark. Sales Growth has a rank of 17, which means that currently professionals expect the company to grow less than 83% of its competitors. The same is valid for Profit Growth, with a rank of 25, and Capital Growth with 33. In addition, Stock Returns have a below market rank of 21, which means that the stock returns have recently been below 79% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 7, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: CVS Caremark Debt Financing Safety below-average
| SAFETY METRICS | January 4, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 40 |
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| REFINANCING | ||||||||
| REFINANCING | 10 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 64 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 33 |
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ANALYSIS: With an Obermatt Safety Rank of 33 (better than 33% compared with alternatives), the company CVS Caremark has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of CVS Caremark is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for CVS Caremark. Liquidity is at 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 10, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 90% of its competitors. Leverage is also high at a rank of 40, which means that the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 33 (worse than 67% compared with alternatives), CVS Caremark has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: CVS Caremark Below-Average Financial Performance
| COMBINED PERFORMANCE | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| COMBINED | ||||||||
| COMBINED | 38 |
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ANALYSIS: With an Obermatt Combined Rank of 38 (worse than 62% compared with investment alternatives), CVS Caremark (Health Care Services, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of CVS Caremark are a good value (attractively priced) with a consolidated Value Rank of 98 (better than 98% of alternatives) but show below-average growth (Growth Rank of 7), and are riskily financed (Safety Rank of 33), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 38, is a hold recommendation based on CVS Caremark's financial characteristics. As the company CVS Caremark's key financial metrics exhibit good value (Obermatt Value Rank of 98) but low growth (Obermatt Growth Rank of 7) and risky financing practices (Obermatt Safety Rank of 33), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 98% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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