Is CVS Health a Great Dividend Stock?
Dividend stocks can generate significant long-term returns for your portfolio by allowing you to benefit from a rising valuation while collecting recurring cash flow along the way. But not every dividend stock is the same -- and very few are great. Before you invest in an income-generating stock for the long term, you need to consider multiple factors.
Not only is it important to assess the strength of the business, but you should also consider whether the company can afford to keep paying its dividend for the foreseeable future. Also note whether the rate it pays today is better than most stocks, and whether it's likely to grow its payouts over the years. Today, I'll look at how CVS Health (NYSE: CVS) performs on these different metrics, and determine whether it's a great dividend stock that you can safely put in your portfolio for decades.
The coronavirus pandemic has been a big test for nearly every business this year, and CVS is one that has adapted well to the adversity. On Nov. 6, the Rhode Island-based company released its third-quarter results for the period ending Sept. 30. Sales of $67.1 billion grew by 3.5% year over year, and year-to-date revenue of $199.2 billion was up by 4.9%. Net income for the quarter fell by 20% to $1.2 billion, but over the past nine months, the company's profits of $4.9 billion have been more than three times last year's $1.3 billion.One of the ways CVS has adapted to the COVID-19 crisis is by opening over 4,000 testing sites. The company says that it's conducted more than 6 million COVID-19 tests thus far.
Source Fool.com
