Ticker: CVS, Buy below $65.
CVS Health is US healthcare company that owns a pharmacy chain, pharmacy benefits manager and a health insurer.
Why I Would Buy
- Defensive Play – Pharmacies and health insurance is generally resistant to economic cycles.
- Cheap – Forward P/E less than 8x.
- Dividend – generous 3.5%+ yield, <40% payout ratio.
What Could Go Wrong
- Retail – Retail is a big part of CVS’s revenues, this has traditionally been a poor and hypercompetitive business segment.
- Debt – Enormous debt load, negative tangible book value.
Disclosure: I am long CVS, please read additional disclosures here before taking any action based on this post.