CVS Health Corporation (NASDAQ:CVS) provides health services in the United States. The company’s Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates. Its Pharmacy Services segment offers pharmacy benefit management solutions, including plan design and administration, formulary management, retail pharmacy network management, mail order pharmacy, specialty pharmacy and infusion, clinical, and disease and medical spend management services. It serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, plans offered on public health insurance and private health insurance exchanges, other sponsors of health benefit plans, and individuals. This segment operates retail specialty pharmacy stores; and specialty mail-order, mail-order dispensing, and compounding pharmacies, as well as branches for infusion and enteral nutrition services. The company’s Retail/LTC segment sells prescription and over-the-counter drugs, consumer health and beauty products, and personal care products; and provides health care services through its MinuteClinic walk-in medical clinics. This segment also distributes prescription drugs; and provides related pharmacy consulting and other ancillary services to care facilities and other care settings. As of December 31, 2021, it operated approximately 9,900 retail locations and 1,200 MinuteClinic locations, as well as online retail pharmacy websites, LTC pharmacies, and onsite pharmacies. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was founded in 1963 and is headquartered in Woonsocket, Rhode Island.
- Market Cap: 122.175 Billion
- PE Ratio: 15.50
- EPS: 6.01
- Dividend Yield: 2.36%
- Analysts Rating: 5 Strong Buy, 10 Buy, 9 Hold
While most associate CVS with its pharmacy and retail business, its 2018 acquisition of Aetna transformed the company. While its namesake business continues to be a cash cow, it could lose traction as e-commerce sales increase and companies like Walmart and Costco compete aggressively to win market share in the pharmacy business.
Thus, CVS is focusing on offering higher-margin services with its MinuteClinics and health insurance segments. During the coronavirus crisis, CVS has been an integral part of the healthcare solution, with its retail locations providing testing, basic care and vaccinations.
As healthcare spending explodes, CVS has seen impressive growth. In its most recently reported quarter, the company reported a 10% year-over-year rise in revenue and an 18.7% jump in earnings per share.
CVS has an overall A (Strong Buy) rating from the POWR Ratings system due in part to a Growth Grade of A. Wall Street expects the company’s momentum to continue in fiscal 2022, with analysts forecasting an 8.1% rise in revenues and a 9.5% improvement in EPS.
In conclusion, CVS is one of the better defense stock to own for the long term.