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Forbes
a day ago
- Business
- Forbes
CVS And Archer-Daniels-Midland Look Good On This Ratio
An Archer Daniels Midland plant in Decatur, Illinois. AP Photo/Seth Perlman, File There are many ways companies can manipulate their reported profits. Fudging sales (also known as revenue) is more difficult. That's one reason why I always check the price-to- sales ratio when I'm considering a stock. It's simply the stock's price divided by sales per share. For example, CVS Health Corp. (CVS) sells for $64.78 a share. For each share of stock, it has revenue of $300.52. So, its price-to-sales ratio is 0.22. That's quite low. An average price-to-sales ratio today is 3.1, up from about 2.4 normally. I prefer to see ratios under 2.0, and anything under 1.0 really catches my eye. Naturally, companies with low profit margins sell for a lower price/sales multiple than very profitable companies do. So, it's useful to compare a stock's price/sales ratio with that same stock's historical average. Over the past ten years, CVS stock has averaged a 0.37 ratio. At the current 0.22, it's cheap compared to its own norm. I think CVS is a bargain. Rival Walgreen's is closing stores. Another rival, Rite Aid, declared bankruptcy in May – for the second time. Here are a few more stocks that look good to me now, based on their price-to-sales ratios. A processor of agricultural commodities and a big grain trader, Archer-Daniels-Midland Co. (ADM) is based in Chicago, Illinois. Its price/sales ratio is 0.32, which is below most of its industry peers and below its own historical average of 0.40. Wall Street analysts can't stand this stock. Of the dozen analysts who cover it, nary a one rates it a 'buy.' Nine call it a 'hold' (often a euphemism for sell) and three rate it 'underperform.' That's pretty gloomy, considering that Archer-Daniels has increased its earnings at better than a 10% annual clip in the past decade. Flex Ltd., headquartered in Austin, Texas, is a contract electronics manufacturer. Among its customers are Johnson & Johnson, Abbott, Nike, Bose, Ford, Applied Materials and Teradyne. To me, that looks like a high-quality and diversified customer base. Flex has increased its profits at a 10% annual clip for the past decade. Last year was better, with a 22% profit increase on an 8% increase in sales. The price/sales ratio is 0.8, which is above the company's usual valuation but still in attractive territory, by my reckoning. I don't know if we've already hit the bottom of the commercial real-estate bust that began with the Covid-19 epidemic. But if not, I think we're close. Therefore, I think this is a good time to consider Jones Lang LaSalle Inc. (JLL), a leading commercial real-estate broker, property manager and real-estate investor. It sells for 0.52 times revenue, and revenue has grown nearly 13% a year for the past decade. In a possible sign that the office market is reviving, Jones Lang's revenue rose a bit more than 13% last year. As a speculation, I like Mission Produce Inc. (AVO) of Oxnard, California, which produces and sells avocados. Perhaps it's a fad, but avocados have gotten very popular lately, so much so that avocado rustling (theft from orchards and trucks) has become a big problem. Last year, Mission's profits jumped 84% on a 29% sales increase. The stock trades at 0.62 times revenue. It has strong finances, and very little Wall Street coverage. In 22 years, my recommendations based on an attractive price-to-sales ratio have achieved an average return of 28.1%, dwarfing the 10.4% average for the Standard & Poor's 500 Total Return Index. Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future. My high average return owes a lot to large gains on the picks I made in 2000, 2002, and 2012. Of my 22 past columns on this subject, 18 have been profitable and 12 beat the S&P 500. My picks from a year ago mostly stumbled. Wabash National Corp. (WNC), which makes truck trailers, fell 51%. Bunge Global SA (BF), a processor of agricultural products, dropped nearly 29%. Reinsurance Group of America Inc. (RGA) fell 8%. Only two of my five picks rose. Pilgrims Pride Corp. (PPC), a chicken processor, jumped 32%. PC Connection Inc. (CNXN) eked out a small positive return, about 3%. For the same period (July 15, 2024 to July 11, 2025), the Standard & Poor's index advanced 12.6%. Disclosure: I currently have no positions in the stocks mentioned in today's column, personally or for clients.
Yahoo
3 days ago
- Business
- Yahoo
CVS Health's (CVS) Dividend Outlook: Can the Retail-Pharma Giant Deliver in 2025?
CVS Health Corporation (NYSE:CVS) is included among the 14 Best Pharma Dividend Stocks to Buy in 2025. A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products. CVS Health Corporation (NYSE:CVS)'s retail pharmacy business may be widely recognized, but it represents just a small portion of its broader business. The company also runs a top-tier pharmacy benefits management division and owns Aetna, a major player in the health insurance space. Although CVS Health Corporation (NYSE:CVS)'s stock took a significant hit last year, it has rebounded this year. The stock has surged by over 43% since the start of 2025. The company also reported strong earnings in the first quarter of 2025, with revenues coming in at $94.6 billion. The revenue showed a 7% growth from the same period last year and also beat analysts' estimates by $1.22 billion. CVS Health Corporation (NYSE:CVS) also posted a solid cash position with an operating cash flow of $4.6 billion. The company increased its operating cash flow forecast from around $6.5 billion to roughly $7.0 billion. This cash position has enabled the company to pay uninterrupted dividends to shareholders since 1997. Currently, it offers a quarterly dividend of $0.665 per share and has a dividend yield of 4.20%, as of July 17. While we acknowledge the potential of CVS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
CVS Health (CVS) Dips More Than Broader Market: What You Should Know
CVS Health (CVS) closed the most recent trading day at $61.96, moving -2.12% from the previous trading session. This change lagged the S&P 500's 0.01% loss on the day. Elsewhere, the Dow lost 0.32%, while the tech-heavy Nasdaq added 0.05%. The drugstore chain and pharmacy benefits manager's stock has dropped by 5.3% in the past month, falling short of the Medical sector's loss of 1.59% and the S&P 500's gain of 5.37%. Investors will be eagerly watching for the performance of CVS Health in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on July 31, 2025. It is anticipated that the company will report an EPS of $1.47, marking a 19.67% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $93.72 billion, up 2.73% from the prior-year quarter. Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.12 per share and revenue of $385.5 billion, indicating changes of +12.92% and +3.4%, respectively, compared to the previous year. Investors should also take note of any recent adjustments to analyst estimates for CVS Health. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential. Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model. The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.32% higher. CVS Health presently features a Zacks Rank of #2 (Buy). Valuation is also important, so investors should note that CVS Health has a Forward P/E ratio of 10.35 right now. This indicates a discount in contrast to its industry's Forward P/E of 15.4. Meanwhile, CVS's PEG ratio is currently 0.91. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical Services was holding an average PEG ratio of 1.52 at yesterday's closing price. The Medical Services industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 90, placing it within the top 37% of over 250 industries. The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CVS Health Corporation (CVS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
4 days ago
- Business
- Globe and Mail
CVS Health's Caremark to Lead CalPERS' PBM Vision: What's at Stake?
Rising prescription drug costs remain a top healthcare concern, with pharmacy benefit managers (PBMs) facing heightened scrutiny for their role in managing prescription drug benefits for insurers and health plans. CVS Health 's CVS Caremark business recently secured a new pharmacy benefits contract with The California Public Employees' Retirement System (CalPERS) — the largest public pension fund in the United States. The five-year agreement replaces OptumRx, UnitedHealth Group 's UNH PBM, which had served CalPERS members over the past nine years. Starting Jan. 1, 2026, Caremark will provide outpatient prescription drug benefits to nearly 587,000 members enrolled in Basic or Medicare HMO and PPO plans, which is roughly 40% of CalPERS' 1.5 million beneficiaries. CVS will also work closely with CalPERS to develop a range of options for managing formulary changes that could affect copays or require switching to an equally effective alternative. Essentially, CVS Caremark was selected over other vendors for its ability to deliver more affordable drug benefits, and its commitment to strong contract terms around accountability, transparency and groundbreaking financial guarantees. The company puts $250 million at risk if it fails to meet targets for controlling pharmacy benefit costs and delivering clinical quality outcomes tied to improving care for high blood pressure and diabetes. The contract positions CVS Caremark at the forefront of CalPERS' efforts to create a model that can serve as 'a blueprint for purchasers nationwide'. This year, CVS Health also opted to prefer Wegovy over Zepbound on its commercial template formularies. The move is designed to promote competition in reducing drug costs and enable broader, more affordable coverage for weight management medications. Clients using CVS Caremark's template formularies could save 10-15% annually in the anti-obesity medication space as a result of this strategic change. Updates From CVS Health's PBM Peers The global PBM market is expanding, with CVS Caremark, OptumRx and Express Scripts (Cigna) dominating the market. Other prominent players include Elevance Health ELV, which offers pharmacy services through its CarelonRx unit. ELV had just released its second quarter-2025 earnings results, with higher CarelonRx product revenues driving a 33% year-over-year increase in Carelon operating gains. The growth in CarelonRx operating revenues was mainly due to higher prescription volume from rising pharmacy membership and contributions from recent acquisitions. Humana HUM, too, operates a PBM business under its Insurance segment. Humana recently announced a partnership with healthcare software company Epic, becoming the first health insurer to integrate health plan information directly into the MyChart accounts. This enables Humana Medicare Advantage members to access their insurance details, such as vital coverage information, benefits, contacts and other resources, in the same platform where they manage the rest of their care. CVS' Price Performance, Valuation and Estimates In the past year, CVS Health shares have risen 6.3% against the industry's 17.7% fall. CVS shares are trading at a forward one-year price-to-earnings ratio of 9.60 compared to the industry average of 14.00. The stock carries a Value Score of A. Image Source: Zacks Investment Research Analyst estimates for the company's 2025 and 2026 earnings are showing an upward trend. Image Source: Zacks Investment Research CVS stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include Stock #1: A Disruptive Force with Notable Growth and Resilience Stock #2: Bullish Signs Signaling to Buy the Dip Stock #3: One of the Most Compelling Investments in the Market Stock #4: Leader In a Red-Hot Industry Poised for Growth Stock #5: Modern Omni-Channel Platform Coiled to Spring Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%. Download Atomic Opportunity: Nuclear Energy's Comeback free today. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report Humana Inc. (HUM): Free Stock Analysis Report CVS Health Corporation (CVS): Free Stock Analysis Report Elevance Health, Inc. (ELV): Free Stock Analysis Report
Yahoo
5 days ago
- Business
- Yahoo
CVS Health's Q2 2025 Earnings: What to Expect
Woonsocket, Rhode Island-based CVS Health Corporation (CVS) offers a comprehensive range of healthcare solutions, including pharmacy benefit management services, mail-order pharmacies, retail pharmacies, specialty pharmacies, disease management programs, and retail clinics. Valued at a market cap of $80.7 billion, the company combines clinical expertise, technology, and personalized care to deliver comprehensive health solutions that support better health outcomes and long-term wellness. It is scheduled to announce its fiscal Q2 earnings for 2025 before the market opens on Thursday, Jul. 31. Before this event, analysts project this healthcare solutions provider to report a profit of $1.47 per share, down 19.7% from $1.83 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in each of the last four quarters. Its earnings of $2.25 per share in the previous quarter topped the consensus estimates by a notable margin of 31.6%. More News from Barchart Dear Google Stock Fans, Mark Your Calendars for July 23 Dear UnitedHealth Stock Fans, Mark Your Calendars for July 29 Peter Thiel Is Betting Big on This Ethereum Treasury Stock. Should You Buy Shares Now? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! For the full year, analysts expect CVS to report EPS of $6.12, up 12.9% from $5.42 in fiscal 2024. Its EPS is expected to further grow 14.4% year-over-year to $7 in fiscal 2026. CVS has gained 6.2% over the past 52 weeks, underperforming the S&P 500 Index's ($SPX) 10.5% return over the same time frame. However, it has outpaced the Health Care Select Sector SPDR Fund's (XLV) 10.4% loss over the same period. On May 1, shares of CVS observed a 4.1% rise after the company reported better-than-expected Q1 results. Its overall revenue improved 7% year-over-year to $94.6 billion, topping the consensus estimates by 1.8%. Moreover, its adjusted EPS of $2.25 advanced 71.8% from the year-ago quarter, exceeding the analyst estimates by a notable margin of 31.6%. Robust revenue and adjusted operating income growth across all of its reportable segments aided its quarterly results. Additionally, CVS raised its fiscal 2025 adjusted EPS guidance in the range of $6 to $6.20, reflecting strong performance across each of its businesses. Wall Street analysts are highly optimistic about CVS' stock, with a "Strong Buy" rating overall. Among 23 analysts covering the stock, 17 recommend "Strong Buy," two indicate "Moderate Buy," and four suggest "Hold.' The mean price target for CVS is $79.55, implying a 24.7% premium from the current levels. On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
