In my stock watchlist I added CVS Health recently.
The price has gone down because of fears of Amazon (AMZN) entering the pharmacy industry and disrupting things. The funny thing is that nowhere did Amazon actually confirm or announce they would do so. And since there isn't really anything fundamentally wrong with CVS Health, I think this is a very good opportunity to scoop up some shares.
Reasons why I like CVS Health
- Revenue grew from $76,330 billion in 2007 to $177,526 billion in 2016, which is a Compound Annual Growth Rate of 8.81%.
- Earnings Per Share grew from $1.92 in 2007 to $4.90 in 2016, which is a CAGR of 9.82%.
- Dividends have been increased for the last 13 consecutive years. They grew their dividend from $0.23 in 2007 to $1.70 in 2016, which is an annual dividend growth rate of 22.14% over the last decade. WOW!
- Dividend yield of 2.61%, which is higher than it's historical average. (If anyone knows how to find the 10-year average dividend yield of a company, please let me know, thanks :))
- Forward P/E of 12.2.
- Outstanding share count has decreased from 1,371 million in 2006 to 1,079 million in 2017.
I bought my first 15 shares of CVS Health in february this year, for an average of $80.59. Today I bought another 15 shares for $75.84 per share, for a total of $1,137.62, averaging down on my initial purchase. With this purchase I now own 30 shares of CVS Health with an average buy price of $78.22. The total market value at market close on friday 21 October 2017 is $2,293.50.
The stock currently trades for $76.45, so I still have a small loss on paper, but I'm confident that will catch up rather sooner than later. And I'll just catch those juicy dividends while waiting :).
Stock watchlist update
CVS Health is now one of the bigger positions in my Stashing Dutchman's Portfolio, therefore I consider this position 'full'. Unless the share price drops significantly from here, I probably won't any more shares anytime soon. Therefore I have removed CVS from my stock watchlist.
What do you think about this purchase? Do you like CVS Health? Be sure to leave a comment!
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