Why CVS Caremark Is Poised to Outperform

Brian D. Pacampara, The Motley Fool
Updated

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drugstore and pharmacy benefits giant CVS Caremark has earned a coveted five-star ranking.

With that in mind, let's take a closer look at CVS Caremark and see what CAPS investors are saying about the stock right now.

CVS Caremarkfacts

Headquarters (founded)

Woonsocket, R.I. (1892)

Market Cap

$62.1 billion

Industry

Drug retail

Trailing-12-Month Revenue

$120.1 billion

Management

CEO Larry Merlo (since 2011)
CFO David Denton (since 2010)

Return on Equity (average, past 3 years)

9.7%

Cash/Debt

$1.2 billion / $10.0 billion

Dividend Yield

1.9%

Competitors

Express Scripts Holding
Walgreen
Wal-Mart Stores


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 1,746 members who have rated CVS Caremark believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, stockdissector, succinctly summed up the bull case for our community:

CVS possesses enormous purchasing power relative to its peers. CVS filled 990 million prescriptions versus 785 million for Walgreen in 2012. CVS will benefit from the soured relationship between Walgreen and Express Scripts. Obamacare will decrease the number of uninsured expanding CVS's market. All of this adds up to market beating returns.

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its five-star rating, CVS Caremark may not be your top choice.

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The article Why CVS Caremark Is Poised to Outperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Express Scripts. Motley Fool newsletter services recommend Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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