Summary
- The first quarter of 2020 shows CVS huge potential going forward.
- COVID-19 shows a demand for more health care services is on the horizon.
- CVS continues to grow via acquisitions.
- CVS debt is high but so is cash flow and EBITDA.
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CVS Health (CVS) is the largest health care provider in the US. On a revenue basis, it's about the same size as Apple (AAPL), $256 billion vs. $260 billion. With 9,900 retail locations, CVS blankets the US mainland.
After acquiring Aetna Insurance in 2018, CVS now offers medical service from insurance to prescription, to testing and in-home treatments. This stem to stern capability makes it unique in the health care market.
With its extensive network, CVS is expanding the high-margin services component of its business using the retail outlets as a customer-centric collection point. This should improve profits going forward.
With projected 2020 earnings of $7.07 to $7.14 at a price of $64, CVS is currently selling at a 9X price-earnings ratio.
That makes it a bargain.
Here are 4 reasons to buy CVS.
