CVS
CVS Health Corporation
Healthcare · Healthcare Plans · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 39.2/100 reflects a combination of modest revenue growth offset by a dramatic collapse in net income and earnings per share [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy].
- Extremely thin profitability metrics — including a 0.4% net margin and 0.7% return on assets — weighed heavily on the overall score [profitability.net_margin_pct, profitability.roa_pct].
- CVS received no macro theme assignment, meaning it earned zero theme-based score contribution, further limiting its total composite score [theme.none].
Why Not Higher
- Despite top-line growth, the near-total collapse in net income and EPS, combined with a payout ratio of 192.1% that far exceeds earnings, prevented a higher score [growth.net_income.yoy, growth.eps_diluted.yoy, dividend.payout_ratio].
- The absence of any macro theme assignment and the severe mid-period operating losses — including a -$3.2 billion operating income quarter — capped the momentum and theme score contributions [momentum.operating_income_quarterly, theme.none].
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $372,809,000,000 to FY2025's $402,067,000,000, a gain of 7.8%. However, net income fell sharply from FY2024's $4,614,000,000 to FY2025's $1,768,000,000 (-61.7%), and diluted EPS dropped from FY2024's $3.66 to FY2025's $1.39 (-62.0%).
The model rewarded modest top-line expansion but heavily penalized the steep collapse in bottom-line profitability, resulting in a below-average composite growth score.
In FY2025, CVS posted a net margin of 0.4%, an operating margin of 1.2%, and a return on assets of 0.7%, all of which are extremely thin by most standards.
The model assigned a low score because all three profitability metrics indicate that the company retains very little earnings relative to its revenue and asset base, signaling limited pricing power or elevated cost pressure.
In FY2025, CVS reported a debt-to-equity ratio of 0.8 and total assets of $253,538,000,000.
A debt-to-equity ratio of 0.8 in FY2025 suggests a moderate leverage level, which the model treated as neither a clear strength nor a significant concern, contributing to a mid-range score.
Quarterly revenue was relatively stable, ranging from $98,915,000,000 in 2025Q2 to $105,693,000,000 in 2025Q4 before dipping to $100,426,000,000 in 2026Q1. Operating income showed high volatility, swinging from $2,381,000,000 in 2025Q2 to -$3,207,000,000 in 2025Q3, then recovering to $2,112,000,000 in 2025Q4 and surging to $4,680,000,000 in 2026Q1. Net income followed a similarly erratic path, from $1,021,000,000 in 2025Q2 to -$3,975,000,000 in 2025Q3, then $2,943,000,000 in both 2025Q4 and 2026Q1.
The model recognized the strong operating income recovery into 2026Q1 as a positive signal, but the severe mid-period losses and revenue softness in the most recent quarter tempered the overall momentum score to a mid-range level.
CVS has maintained a rising dividend per share trend from FY2022's $2.20 to FY2023's $2.42 and FY2024's $2.66, holding steady at $2.66 in FY2025. However, the dividend payout ratio in FY2025 stood at 192.1%, meaning dividends paid substantially exceeded net income for the year.
The model rewarded the multi-year history of dividend growth and the maintained per-share level, but the payout ratio well above 100% in FY2025 signals that the current dividend is not covered by earnings, introducing sustainability risk that likely constrained the score from reaching its maximum.
CVS is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a macro theme assignment means the security did not receive any theme-based score contribution under the model's current methodology; this reflects a classification status rather than a judgment on the company's business.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
CVS Health posted 7.8% revenue growth in FY2025, reaching $402 billion, but net income collapsed 61.7% to $1.77 billion, leaving the company with razor-thin margins of 0.4% net and 1.2% operating [growth.revenue.yoy, growth.net_income.yoy, profitability.net_margin_pct, profitability.operating_margin_pct]. Quarterly results have been highly volatile, including a severe operating loss of $3.2 billion in 2025Q3, though 2026Q1 showed a strong operating income recovery to $4.68 billion [momentum.operating_income_quarterly]. The dividend has been maintained at $2.66 per share but is deeply uncovered, with a payout ratio of 192.1% in FY2025, raising sustainability concerns [dividend.payout_ratio, dividend.dps_trend]. Overall, the model rates CVS as High Risk with a Monitor Only label, reflecting weak profitability, earnings volatility, and dividend strain.
Plain English
CVS is bringing in more revenue than ever, but it's barely making any profit — and it's paying out nearly twice its earnings as dividends, which isn't sustainable [growth.revenue.yoy, growth.net_income.yoy, dividend.payout_ratio]. The company had a really rough patch mid-year with big losses, though the most recent quarter looked better [momentum.operating_income_quarterly].
Bull Case vs. Bear Case
Bull Case
- Revenue grew 7.8% year-over-year to over $402 billion in FY2025, demonstrating continued top-line expansion at scale [growth.revenue.yoy].
- Operating income surged to $4.68 billion in 2026Q1, suggesting a meaningful recovery from the mid-period losses and potential stabilization of the business [momentum.operating_income_quarterly].
- CVS has grown its dividend per share consistently from $2.20 in FY2022 to $2.66 in FY2024, maintaining that level in FY2025, reflecting a multi-year commitment to returning capital to shareholders [dividend.dps_trend].
Bear Case
- Net income fell 61.7% in FY2025 to $1.77 billion, and diluted EPS dropped 62% to $1.39, signaling a severe deterioration in bottom-line profitability despite top-line growth [growth.net_income.yoy, growth.eps_diluted.yoy].
- Profitability metrics are extremely thin — a 0.4% net margin, 1.2% operating margin, and 0.7% return on assets — indicating the company retains very little of its massive revenue base [profitability.net_margin_pct, profitability.operating_margin_pct, profitability.roa_pct].
- The dividend payout ratio reached 192.1% in FY2025, meaning CVS paid out nearly twice its net income in dividends, raising serious questions about dividend sustainability [dividend.payout_ratio].
What Could Change the Picture
Bullish Triggers
- A sustained recovery in operating income — building on the $4.68 billion posted in 2026Q1 — combined with meaningful net margin improvement would signal that the worst of the profitability pressure may be behind the company [momentum.operating_income_quarterly, profitability.net_margin_pct].
- If net income recovers sufficiently to bring the dividend payout ratio back below 100%, it would validate both earnings stabilization and dividend sustainability [dividend.payout_ratio, growth.net_income.yoy].
Bearish Triggers
- A return to operating losses similar to the -$3.2 billion recorded in 2025Q3 would confirm that the recent recovery is fragile and that structural cost pressures remain unresolved [momentum.operating_income_quarterly].
- Further compression of already razor-thin margins — currently at 0.4% net and 1.2% operating — would deepen concerns about the company's ability to generate meaningful earnings from its large revenue base [profitability.net_margin_pct, profitability.operating_margin_pct].
Risk Profile
High RiskCVS carries moderate financial leverage with a debt-to-equity ratio of 0.8 against a total asset base of $253.5 billion, which is neither a clear strength nor an acute concern [financial_health.debt_to_equity, financial_health.total_assets]. However, the extreme volatility in quarterly operating income — swinging from -$3.2 billion in 2025Q3 to +$4.68 billion in 2026Q1 — introduces meaningful operational uncertainty that elevates the overall risk profile [momentum.operating_income_quarterly].
Key Catalysts to Watch
The strong recovery in operating income to $4.68 billion in 2026Q1 could serve as an early indicator of improving operational performance if the trend continues [momentum.operating_income_quarterly].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.