Introduction
According to Zacks Investment Research CVS Health is the world’s 7th largest company by revenue and ranked 7th on the Fortune Global 500 list. The company reported Q3 earnings on November 2, 2021 and reported Non-GAAP EPS of $1.97 beats by $0.18; GAAP EPS of $1.20 misses by $0.20. Revenue of $73.79B (+10.0% Y/Y) beats by $3.27B.
CVS appears to be significantly undervalued and offers a margin of safety more than 27%. The company’s current dividend yield is approximately 2.2% and the company’s earnings yield is a strong 8.48%. Consequently, CVS appears to be very attractive as a total return opportunity based on future expected earnings growth plus P/E ratio expansion back to a more normal fundamentals justified fair value.
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Disclosure: Long CVS.
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