June 04, 2025 a 03:31 pm
CVS: Dividend Analysis - CVS Health Corporation
CVS Health Corporation has consistently shown resilience in maintaining its dividends, with a commendable history spanning over four decades. The company's enterprise-wide approach to serving their clients and stakeholders enhances trust, making CVS a reliable choice in the health sector.
📊 Overview
CVS Health Corporation operates within the Health sector, recognized for a robust dividend yield of 4.06%. The company disburses a current dividend per share of 2.68 USD and has a remarkable dividend history spanning 41 years with no recent cuts or suspensions. This consistency underscores CVS's commitment to delivering shareholder value while catering to the healthcare needs of a vast clientele.
| Category | Details |
|---|---|
| Sector | Health |
| Dividend Yield | 4.06% |
| Current Dividend per Share | 2.68 USD |
| Dividend History | 41 years |
| Last Cut/Suspension | None |
🗣️ Dividend History
CVS Health Corporation's consistent dividend history highlights its commitment to returning capital to shareholders. With a record extending over 41 years, the company underscores a trust in its financial stewardship and resilience against market fluctuations.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.33 |
| 2024 | 2.66 |
| 2023 | 2.42 |
| 2022 | 2.20 |
| 2021 | 2.00 |
📈 Dividend Growth
Growth in dividends is a critical indicator of a company’s financial health and its ability to enhance shareholder wealth. For CVS Health Corporation, the dividend growth over the past 3 and 5 years has been moderate but consistent, reflecting a stable financial trajectory even amidst challenging market conditions.
| Time | Growth |
|---|---|
| 3 years | 9.97% |
| 5 years | 5.87% |
The average dividend growth is 5.87% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
Payout ratios are a glimpse into a company's earnings distribution strategy. For CVS, a 63.98% EPS-based payout ratio and a 57.05% FCF-based ratio indicate a balanced approach, potentially allowing room for reinvestment in growth initiatives whilst still providing adequate returns to stakeholders.
| Key Figure | Ratio |
|---|---|
| EPS-based | 63.98% |
| Free Cash Flow-based | 57.05% |
These ratios suggest CVS Health's dividends are sustainably backed, balancing between rewarding shareholders and retaining earnings for strategic growth.
✅ Cashflow & Capital Efficiency
Understanding cash flow dynamics and capital efficiency provides insights into a company's operational health and its capability to fund dividends and growth. Key metrics illustrate moderate capital allocation efficiency, with a strategic focus on maintaining robust liquidity and investment potential.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 11.19% | 10.24% | 11.00% |
| Earnings Yield | 8.16% | 8.22% | 3.53% |
| CAPEX to Operating Cash Flow | 32.18% | 22.58% | 16.86% |
| Stock-based Compensation to Revenue | 0% | 0.16% | 0.14% |
| Free Cash Flow / Operating Cash Flow Ratio | 69.46% | 77.42% | 83.14% |
The stable cash flow and effective capital utilization underscore CVS's potential to maintain and grow dividend payouts while adequately financing operations and growth plans.
📉 Balance Sheet & Leverage Analysis
Balance sheet health and leverage metrics are crucial in evaluating financial stability and risk exposure. CVS Health Corporation maintains leverage within acceptable thresholds, ensuring flexible capital management and strategic growth potential.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.10 | 1.04 | 0.99 |
| Debt-to-Assets | 32.75% | 31.79% | 30.99% |
| Debt-to-Capital | 52.32% | 50.94% | 49.74% |
| Net Debt to EBITDA | 5.43 | 3.91 | 4.68 |
| Current Ratio | 0.811 | 0.857 | 0.945 |
| Quick Ratio | 0.597 | 0.629 | 0.670 |
| Financial Leverage | 3.35 | 3.27 | 3.19 |
With a stable debt structure and strong financial leverage, CVS is well-poised to manage its obligations and pursue opportunities that enhance shareholder value.
🔍 Fundamental Strength & Profitability
Fundamental performance indicators provide insights into a company's efficiency and profitability. CVS Health's metrics reflect robust profitability and efficient capital utilization, critical for sustaining competitive advantage and delivering consistent returns.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 6.11% | 10.91% | 6.03% |
| Return on Assets | 1.82% | 3.34% | 1.89% |
| Margins: Net | 1.24% | 2.33% | 1.34% |
| EBIT | 2.44% | 3.87% | 2.52% |
| EBITDA | 3.67% | 5.09% | 3.83% |
| Gross | 13.79% | 15.21% | 16.90% |
| Research & Development to Revenue | 0% | 0% | 0% |
The healthy margins and return metrics reflect CVS Health's strategic advantage in maximizing resource utilization and boosting profitability, crucial for long-term growth and shareholder returns.
📈 Price Development
🏆 Dividend Scoring System
The individualized dividend scoring system evaluates multiple metrics to comprehensively score CVS Health Corporation, ultimately providing investors a clear view of its dividend potential and sustainability.
| Criterion | Score | |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 4 |
Total Score: 31/40
Rating
Overall, CVS Health Corporation presents a compelling dividend profile characterized by stability, moderate growth potential, and strong dividend continuity. The balance of payout ratios and robust financial health underlines its strategic commitment to shareholder value, making it an appealing choice for dividend-focused investors.