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Should Value Investors Buy CVS Health (CVS) Stock?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is CVS Health (CVS - Free Report) . CVS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.33, while its industry has an average P/E of 10.08. Over the past year, CVS's Forward P/E has been as high as 12.88 and as low as 8.42, with a median of 10.15.
Investors will also notice that CVS has a PEG ratio of 0.85. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CVS's industry currently sports an average PEG of 0.92. Over the past 52 weeks, CVS's PEG has been as high as 1.41 and as low as 0.77, with a median of 1.
Another notable valuation metric for CVS is its P/B ratio of 1.82. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.08. Over the past year, CVS's P/B has been as high as 2.27 and as low as 1.60, with a median of 1.93.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CVS has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.42.
Finally, investors should note that CVS has a P/CF ratio of 6.97. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.33. Over the past 52 weeks, CVS's P/CF has been as high as 9.65 and as low as 6.61, with a median of 7.61.
Value investors will likely look at more than just these metrics, but the above data helps show that CVS Health is likely undervalued currently. And when considering the strength of its earnings outlook, CVS sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy CVS Health (CVS) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is CVS Health (CVS - Free Report) . CVS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.33, while its industry has an average P/E of 10.08. Over the past year, CVS's Forward P/E has been as high as 12.88 and as low as 8.42, with a median of 10.15.
Investors will also notice that CVS has a PEG ratio of 0.85. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CVS's industry currently sports an average PEG of 0.92. Over the past 52 weeks, CVS's PEG has been as high as 1.41 and as low as 0.77, with a median of 1.
Another notable valuation metric for CVS is its P/B ratio of 1.82. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.08. Over the past year, CVS's P/B has been as high as 2.27 and as low as 1.60, with a median of 1.93.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CVS has a P/S ratio of 0.36. This compares to its industry's average P/S of 0.42.
Finally, investors should note that CVS has a P/CF ratio of 6.97. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 7.33. Over the past 52 weeks, CVS's P/CF has been as high as 9.65 and as low as 6.61, with a median of 7.61.
Value investors will likely look at more than just these metrics, but the above data helps show that CVS Health is likely undervalued currently. And when considering the strength of its earnings outlook, CVS sticks out at as one of the market's strongest value stocks.