CVS Health Corp. is one of the largest retail pharmacies in the U.S.iStockphoto
Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.
With over 9,700 retail locations, CVS Health Corp. is one of the largest retail pharmacies in the U.S. The firm has other business lines, including a pharmacy benefit management (PBM) business and pharamcy care for seniors.
The stock, which is well off its 52-week high of $88.58, gets high marks from various guru-based models run by Validea.
The Peter Lynch investment model, which is based on the book, One Up on Wall Street, considers the firm a "True Stalwart" based on its 11.9-per-cent long-term EPS growth rate.
The yield-adjusted PEG of 0.99 also helps the stock's attractiveness.
Another model that rates the stock highly is the quantitative value method developed by Joel Greenblatt. Mr. Greenblatt developed and tested a stock selection strategy that combined two variables: the earnings yield and a firm's return on capital. Finding the top stocks that had the best combined ranking showed significant market outperformance. CVS, based on the combined rank of earnings yield and return on capital, is the 28th best stock in the Validea universe.
The current dividend yield on the shares is 2.8 percent, making it a decent yield play as well for those looking for some type of dividend income.
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