Is CVS Health's High-Yield Dividend in Danger of Being Cut?

Shares of CVS Health (NYSE: CVS) have been under pressure this month after the healthcare giant reported uninspiring quarterly results. It also reduced its guidance for the year. With the company facing higher costs and headwinds due to macroeconomic conditions, investors have grown wary of the stock, and its dividend as well. Now yielding around 4.8% per year, is CVS Health's dividend too high and due for a cut?

To know whether a company can maintain its current dividend, a useful metric for investors to monitor is the payout ratio. It looks at annual dividends per share versus annual earnings per share (EPS) to determine what percentage of earnings are being paid out in the form of dividends. While there have been fluctuations in the past, CVS has averaged a payout ratio of just over 50% in the past three years.